- Companies are offering investment options for employees such as 401(k) and not offering fixed dollar amount pensions. Very few employers today offer a pension that pays a fixed amount of income in the future. What this means is that the employee has to be more prudent in investing for the future. The employee must manage retirement dollars instead of the employer and has more at risk now than ever before.
- The Federal government is offering tax incentives for retirement investing such as a 401(k) or an IRA. Why? One reason is to reduce future liability issues such as Medicaid, etc.
- Since each person has more at risk in preparing for retirement, it is very important for each person to have a retirement plan and an investment strategy. If investing is done well, a person can have more money than with a fixed dollar pension. Why? because fixed amount pensions tend to invest in safer, lower performing, investments. Over the long term, equity investments have shown to give better performance.
- More people are investing than ever before so more money is going into investments. This is a positive development for purchasing equities.
- Private Equity Firms are buying up lots of publicly traded companies leaving a smaller supply of stocks. This is a positive development for purchasing equities.
Each investor should follow investment trends.
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