The stock market's strong performance and volatility are shaping investment in 401(k) accounts, says a new study by Spectrem Group. The study, conducted in late 1998, notes these trends of 401(k) participants:
- Increased contributions to equity options -- nearly 76% of contributions, up from 73% in a 1996 Spectrem study and 64% in 1994. Market performance and investment education programs are stimulating the increase.
- Greater use of professional advisors -- 36% in 1998 vs 19.6% in 1996. Most participants now have more than eight options and higher account balances, driving this increased reliance.
- More use of online investment information -- 14% in 1998 vs 3% in 1996.
- Increased account transactions. Participants using a toll-free number for information: 52% in 1998 vs 34% in 1996. Participants initiating transactions: 33%, up from 21%.