Yes, it's a curious coincidence that the people writing this report, surely in good faith, just happened to pick March 2020 as the point of comparison.

And most of that growth is just on paper; it represents very little growth in actual spending power. It can be explained by (1) some economic recovery after COVID and (2) devaluation of the dollar.

You have more dollars, but they're worth significantly less, so you're really not much better off.

Also, SPY high in Feb 2020: $330. Did the world's richest men (and everyone else who invested in SPY) lose a third of their wealth in the month back then?

Yea its such a case of biased sampling. Next up, my blood pressure spikes after pounding 2 esspressos and a cokacola

I thought we were done seeing this trick in 2021, when there were all those news articles describing how much money billionaires had "made" "during the pandemic" which also used March 2020 as their baseline.

> Seven of the world’s ten biggest companies have a billionaire as their CEO or main shareholder, the report found.

This is similarly insightful. It’s unsurprising that the richest companies are owned by the richest men.

Should I be angry that my employer-managed 401(k) is only up 43% in that time period?

Edit: This is not sarcasm - I'm not knowledgeable about investment.

Your 401(k) is probably set up to invest in what's known as a target-date fund, where you pick a year (often rounded to the nearest one divisible by 5) you want to retire, and the fund manager allocates among various risk asset classes based on that. Almost always, the further away you are from retirement, the more risk you can take; when you near retirement, it's probably almost all in bonds and other less risky assets.

Sometimes employer-managed 401(k) fund managers take a much larger management fee compared to, say, Vanguard, which adds up over decades, so you could be mad about that.

That depends entirely on the ratio between how much you already had invested at the start of that time period versus how much you invested throughout that time period. If the ratio is nearly infinite (i.e., you had a lot to begin with and hardly added any more) then yeah your S&P500 balance should've grown about 100%. But if the ratio is nearly zero (i.e. you didn't have much at all invested at the start but contributed heavily since then) and for simple math we say that the S&P500 grew linearly, then you should expect only a 50% growth because only the early contributions rode that train while the recent contributions hardly had a chance. In reality it'll be somewhere in between.

And as pointed out by others, this assumes S&P500. If you're in a lifecycle fund instead, that's a bit like having mostly S&P500 when you're young and hardly any when you're old.

Thanks - my benefits portal calls the 43% figure my "rate of return". I am assuming that doesn't include the contributions themselves.

Rate of return = (current value of the account - value of all of your contributions) / current value of your account. That is to say, the total growth of your contributions.

Yes, but only if that 401(k) is entirely invested in a (relatively risky for retirement accounts) S&P 500 index, which is unlikely.

Thanks, so I take it the parent's "zero effort or insight" characterization is in an implicitly riskier context (I was interpreting it as a synonym for "safe").

401Ks usually target a somewhat safer subset of the market for investment than the raw S&P

On top of that, the default “safe” investment, US investment grade bonds, are actually down since March 2020 (which is highly unusual for bond funds over that long of a period). So a typical 401k investment of 70/30 stocks:bonds would be expected to have done significantly worse than 100% stock.

See: https://www.portfoliovisualizer.com/backtest-asset-class-all...