[Marxism] 401k's gone forever?

[S. Artesian]

Loss is loss.  Suppose over time, equities (stocks) return on average 9% a 
year.  After 8 years the money invested has doubled.  Now let's say the 
markets plunge 40% in say, oh just for the hell of it, 8 months.  Now the 
eight year 100% gain has been reduced to a 20% gain over 8 years and 8 
months.

Say the markets climb 30% over the next 2 years.  So after 11 years, you 
have gained 55%, about a 4.4% average annual rate.

BUT:  what is the average age of funds in a 401K?  What percentage of total 
contributions are more than 8 years old?  What percentage has been 
contributed in the last 2 years-- then the 40% loss and 30% gain might leave 
you with about 80% of your contributions.  Ah yes, the magic of annualized 
returns, dollar cost averaging, compound interest and all that junk that 
parts fools from their money.

Here's another issue:  what if your company goes bankrupt?  The assets in 
your 401K are not guaranteed, and in some cases, are subject to claims by 
debt holders.

And the Pension Benefit Guaranty Corporation?  Like the Holy Roman Empire, 
neither Pension, nor Benefit, nor Guaranty.


 From: "Sky Keyes-Vogt" <skeyesvogt at gmail.com>
To: <sartesian at earthlink.net>
Sent: Wednesday, October 15, 2008 9:30 AM
Subject: [Marxism] 401k's gone forever?