An insightful colleague of mine recently wrote up 5 ways to prepare for U.S. default ,which included the advice to not shift your retirement money into cash.
Those of you investing in Johnny Cash LPs, by all means continue.
For the rest of us investing in actual cash who might have trepidations about sticking it out for the long haul, take a look at the numbers.
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In 2009, the average large 401(k) plan had median cash holdings of $224,000. The following year, that number dropped more than 21 percent. People were coming out of their shells and putting their money where the sun shines.
For the same set of plans, assets in mutual funds rose by 18 percent – a $622,000 increase per plan.
What it boils down to is that, in 2009, for every dollar put into cash, $15 was put into a mutual fund. In 2010, that number increased to $23.
Things are getting healthier. Stick with the pack and get ahead, or play it safe and fall behind.
While not reported on the 5500, our best estimates indicate that for every dollar put into Johnny Cash LPs, $8 million was put into mutual funds.
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