Military families are avoiding the stock market when it comes to their retirement savings. According to the First Command Financial Behaviors Index, an assessment of trends in Americans’ financial behaviors, career military families invested in the federal government’s Thrift Savings Plan are choosing to keep their money in low-risk, low-yield government securities. The most popular is the G Fund, which offers protection from loss of principle but delivers returns below the rate of inflation. Thirty-six percent of Thrift Savings Plan participants are invested in the G Fund, up eight points from last year. Past market losses appear to be a strong influence on fund participant behavior, as volatility in June led to $1.8 billion moving from equity funds into the G Fund.
Disruptive Technology
The Financial Times has identified several industries it views as being under serious threat from advances in technology and automation. These include travel, component manufacturing and distributing, car insurance, car repair garages and - no surprises here - the financial services industry as a whole. The FT named the increasing number of robo-advisors, as well as increasingly stringent regulations, as the biggest threats to traditional financial services, both in the United Kingdom and the United States. The FT predicts the trend will only continue, bolstered by the growing interest in low-cost financial advice as well as passively managed funds, which robos often recommend. One thing not considered, however, was the disruptive potential of artificial intelligence in wealth management.
College Students Create Stock Index
Students at Husson’s University College of Business in Maine have created their own stock index named—wait for it—the Husson Stock index. It tracks and analyzes 28 companies selected for their specific impacts on the state’s economy. “The companies in this price-weighted index are either based in Maine or have an influence on our state’s economy through employment, the number of consumers they serve, or their overall presence,” says Associate Professor J. Douglas Wellington, who collaborated with University students in developing the index. According to a press release from the school, “Calculated by students on a weekly basis when classes are in session, the index provides both a numerical benchmark and an opportunity for understanding market movement. Students can look at current events and determine the impact these had on the stock valuations. The analysis becomes part of an educational experience where students increase their understanding of stocks and why their prices fluctuate.”