Investing October 16, 2000

Markets Slide, Participant Trading Tepid in September

October 16, 2000 (PLANSPONSOR.com) - Plan participants rode out volatile market swings in September, but appeared to do a bit of portfolio shifting at quarter end, according to the Hewitt 401(k) index.

Reported by

Nevin E. Adams

Despite a volatile month – and one that historically has been painful for investors – participant trading volumes were normal every day except for two, including September 29, when trading volume was about 50% higher than normal as participants shifted money to fixed income investments.

On September 12, trading volume was unusually low – about 70% lower than normal. In fact, trading volumes for the whole month remained tepid, with trading volumes more than 50% below normal on 9 of the 20 trading days, compared with 6 of 22 in the prior month.

Participant transfers flowed into fixed income funds on a net basis on 12 of the 20 trading days during the month, mirroring August’s trend.

During the month, the Russell 2000 fell 3.07%, the Dow 5.03%, the S&P 500 5.35% and the NASDAQ stumbled 12.68%.

The Hewitt 401(k) index is based on data collected daily from 1.5 million 401(k) participants with approximately $68 billion in collective assets.