Nevin's Data "Points"

Will your 401(k) be chipped by the Chiefs—or soar with the Eagles? That’s what adherents of the so-called Super Bowl Indicator [1] would likely conclude, after all. It’s a “theory” that when a team from the old National Football League wins the Super Bowl, the S&P 500 will rise, and when a team from the old American Football League prevails, stock prices will fall. It’s a “theory” that has been found to be correct nearly 80% of the time—for 41 of the 56 Super Bowls, in fact. Not that it hasn’t had its shortcomings. One need to look back no further than last year’s victory by the Los Angeles Rams that should have been a portent of good times, only to see the S&P 500 slump more than 19% for its biggest loss since 2008.  And while the previous year’s victory by the NFC’s Tampa Bay Buccaneers bolstered the premise behind the “theory,” the year before that the win by the AFC’s (and original AFL) Kansas City Chiefs over the then-NFC Champion San Francisco 49ers...

Perhaps like many of you, I spent the last week watching a series of announcements regarding various school and business closings associated with the coronavirus—but I was also keeping an eye on my retirement savings. I know—this is exactly the thing that most advisors counsel against, not only because it might be depressing (though there’s been plenty of inspiring moments), but because human beings are often inclined to react emotionally, not rationally in markets like these. And, seriously, have there  ever   been markets like these? Now many, perhaps most, participants and plan sponsors will embrace the counsel to not only avoid taking action, but to avoid paying any attention to the short-term volatility of what is, by its very nature, a long-term investment. That said, some will undoubtedly want to do  something. And for those, I offer the following alternatives. If you’re in a target-date fund or managed account: Leave it alone....

If you’ve been asked in the past two weeks what to do about the market (and who hasn’t), I’m sure your response has been something along the lines of . . . “Nothing.” There are, of course, more eloquent ways to express that sentiment. And, let’s face it, when it seems that everyone is asking that question—it’s generally well past the time when it is prudent to try and do—well, anything. Still, it seems that throughout my professional career, every time the market plunges (even when it stays down for an extended period), the pundits all seem to say the same thing; “the fundamentals are sound,” “we’re going through a period of short-term volatility,” or “we were due for a correction” (sometimes all of the above). Granted, this period seems unusual—there is a non-financial cause (the coronavirus outbreak) that is projected/anticipated to have a financial impact of unknown size and duration. That it has emerged at the outset of what is likely to be one of the more conten...

By now, you’ve heard — and perhaps dispensed — what appears to be the “common wisdom” about the recent market tumult: “stay the course,” “ride it out,” and my personal favorite, “don’t just do something, stand there.” For all our industry’s long-standing concern about participant inertia, in times like these the inclination to “do nothing” is undoubtedly to the benefit of most participants. That said, one can well imagine that those who are turning to their advisors for help and guidance (wonder what the robo-advisors are saying?) might be a little frustrated with the admonition that the best thing for them to do right now is… nothing. Early indications are that most retirement plan participants will — again — ride this one out (though there are some exceptions . But, hey — while the markets have your attention, here are five things participants can, and should, do: Check your account balance. While a lot of experts will tell you to avoid looking at your account right after a b...