LCARUSI Posted August 30, 1998 Posted August 30, 1998 I'd like to get a discussion started concerning Sponsor and Participant Reaction to the recent market downdraft. Maybe the current downtrend will not continue, but I suspect (and then again what do I know) the volatility will continue. We have the opportunity here to get responses from a variety of angles - sponsors, consultants, investment managers etc. Question #1 - What are participants doing in response to the current drop in the market? Are they panicking? staying the course? complaining to plan sponsors (of nondaily plans) that they cannot get out of their equity funds? There is an article in the New York Times today (8/30) in the business section which quotes Hewitt Associates as saying they have not seen a significant increase in fund switching in their plans. I assume these are jumbo daily plans. Do you agree/disagree with Hewitt? Question #2 Are Sponsors doing anything special, e.g. communications to participants concerning the merits of long term investing, not locking in losses etc.? Are they considering it? Question #3 If there hasn't been much reaction yet (and I'm not sure of that), when will it kick in if the market downtrend continues? Will there come a panick point when participants start to bail out of the market? I hope we get lots of input on this - specific information, opions or just comments.
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