Strong Stock Market Making 401(k) Investors More Active

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%.
Twenty-eight million U.S. workers now have more than $1.1 trillion invested in 401(k) plans at 283,000 companies, reports Spectrem, a financial services research and consulting firm that's a division of NFO Worldwide.
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