Investors shifted their 401(k) plan allocations away from stocks to bonds and cash in September, according to an analysis by Alight, a retirement plan administrator — a behavior that could be financially perilous, depending on their rationale.
Overall account trading among 401(k) investors was low during the month, signaling that most people weren’t actively moving money or trying to time the market, said Rob Austin, head of thought leadership at Alight.
″[But] when people did make trades, they moved from equities to fixed income,” Austin said. “There’s this flight to bonds, money market and stable value [funds].”
Stories for investors who are retired or are approaching retirement, and are interested in creating and managing a steady stream of income:
During almost every day of the month, net trading favored bonds, stable value funds or money market funds, according to Alight’s analysis, which was based on 401(k) trading activity of more than 2 million people with more than $200 billion in total assets. These are more conservative asset classes relative to stocks.
