Head for the hills, grab the canned goods, batten the hatches—it’s election time.
Reuters reports that jittery investors (and voters) fled U.S.-based stock and bond funds, “finding refuge in cash ahead of the U.S. presidential election.”
Citing Lipper’s latest data, the news service says nearly $7.7 billion fled taxable bond funds in the seven days through Nov. 2, the largest weekly withdrawals this year “by a wide margin.”
“The retreat came just days before Election Day. Some polls showed a tightening race between Democrat Hillary Clinton and her Republican rival Donald Trump, roiling markets,” Reuters writes.
“Meanwhile, Federal Reserve policymakers, widely expected to hike U.S. interest rates in December, said in a statement on Wednesday they see inflation quickening. Rising rates and inflation could be a toxic combination, eroding bond prices.”
Regardless of individual investor behavior, 401(k) participants, at least, are staying the course.
The average 401(k) account balance rose for the second straight quarter, up 2 percent in the third quarter of 2016 and 7 percent over this time last year to reach $90,600.
The average IRA balance increased 5 percent from the second quarter and 6 percent year-over-year to hit $94,100, according to Fidelity’s study of its investors.
Long time savers experienced even better trends. Fidelity’s analysis of 401(k) savers who have been in their company’s 401(k) plan for 15 years straight shows the average account balance reached $331,200 at the end of the third quarter.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
