If not a requirement, then there will likely be a preferred option for it added.

Rather than t bills or some other low risk place to park money not in stocks, im sure they will offer or require e-coin accounts, which is absolute high risk.

PE funds at end of 2023 had $3.5 T invested while public markets were at $54 T (NASDAQ + NYSE). (Source).

Basic math: If $1 T of 401 K money transferred to PE, that could be a 25% or 30% boost to PE; while it could be a 2% dilution to public markets.

Which could create further momentum, as wealth funds seek growth.

Private equity is an investment in a privately held company, while public equity is an investment in a publicly traded company. Public equity is more accessible and liquid, while private equity is riskier and less liquid.
Accessibility:
Public equity
Anyone with an investment account can buy shares of publicly traded companies.
Private equity
Only those with access to the listing can invest, which is usually restricted to high net-worth individuals.

Liquidity:
Public equity: Investors can buy and sell shares quickly.
Private equity: Investments are typically long-term, with funds locked in for several years.

Risk:
Public equity
Returns are generally more stable but can be influenced by market volatility.
Private equity
Often targets higher returns, but has higher risks due to less liquidity and transparency.

So you can imagine why tis can seem shady.

I have an MBA with a focus in finance & economics.
I let the professionals handle my retirement money, 100%
The guardrails within which they operate created a strong sense of security.
I understand business finance. That doesn't make me an investment expert!

Last edited Thu Jan 9, 2025, 03:23 PM - Edit history (1)

Guy was a whiz in all the equations, knew every financial devices inside and out. Had him for 4 or 5 classes. The investors in class were always picking his brain on one thing or another. His response always was the same, "you won't beat the markets long term", especially now with electronic trading using super computers (and soon AI). Slow, steady, and long term is the way to go.

Basically, I see private equity accessing 401K funds as throwing bait to sharks. Private equity are the predators, the villains they make corporate raider themed movies about, handing them $1 Trillion of the 401Ks of regular folks is asking for disaster. These people make Gordon Gecko look like a boy scout.

It will be sold as, "finally make these insider investments, previously only available to millionaires and billionaires, are now available to you..."

There is no get rich scheme, especially when it comes to your 401K. But the beauty of this country still is that if you're able to invest for 3 or 4 decades solid, you can retire at least semi wealthy, anyone can.

...I would have written.
Spot on.