The month may have ended on a down note, but November turned out to be the best month since 1987 for the Dow—and another good month for the average 401(k).
Among major US stock indexes, the Dow Jones Industrial Average (which crossed the 30,000 mark during the month) recorded its best monthly gain since January of 1987—and its best November (on a percentage basis) since 1928. The S&P 500 also wound up November with a 10.75% gain, and its best monthly performance since April—in a month that saw it reach an all-time high (in a year which has seen it do so 26 times), while the small-cap Russell 2000’s 18.3% rise was its best monthly gain on record.
As for the average 401(k), that of older (age 55-64) workers with more than 20 years of tenure was up 7.2%, reversing the 1.6% decline of the prior month. The average 401(k) balance of younger (25-34), less tenured (1-4 years) workers—where contributions have a larger proportionate impact (and the markets generally less)—rose an even better 8.4%, muting October’s 0.8% decline, according to estimates from the nonpartisan Employee Benefit Research Institute (EBRI).[i]
Year-to-date, the average 401(k) of the younger demographic is up 24.7%, while that of the older, more tenured group is still ahead 13.5%.
[i] EBRI’s analysis is based on the organization’s huge database of some 26 million 401(k) plan participants in more than 101,000 employer-sponsored 401(k) plans representing nearly $2 trillion in assets. It includes data provided by a wide variety of plan recordkeepers and, therefore, portrays the activity of participants in 401(k) plans of varying sizes—from very large corporations to small businesses—with a variety of investment options.