There are ways you can use the data from FreeERISA to make long-term investment decisions, but what about getting a picture of the larger market?
I advised against looking at 401(k)s to make your own investment decisions because ultimately their successes are up to who holds the plan and even to the allocation decisions of the participants themselves, not to the business-savvy of the plan sponsors. That said, examining the defined contribution and 401(k) world as a whole can be a good barometer of where the economy is headed.
To build my barometer, I took a look at the 10 401(k) plans who had already filed their 2010 form 5500s and had the biggest gains in terms of raw dollars:
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$16 billion dollars is a lot of money, but how did these plans do last year?
$22 billion dollars is even more than 16. But you know what's even bigger than that?
Negative $36 billion dollars. That's the hit those companies' 401(k) plans took in 2008. But the point of this blog isn't to admonish 2008 for being a terrible year (it knows what it did), the point is to use this information to see where things are going.
All but three companies managed to pick their 401(k) plans back up and get in gear. Overall, these top performers gained nearly $3 billion dollars since the big crash. That sounds nice, but if 2008 returns had looked like 2010 returns, that number would be more than $50 billion. That's $47 billion in missed opportunities. It means a retirement canoe instead of a retirement yacht. It means working to 70 rather than 65. It means that we still have a long way to go.
But we're on the right track.
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