The last Amazon 401k scan was 4-30-2008. The Plan investment options are the same today as far as I know. In the scan posted today I compared the present Balanced portfolio to the 2008 Balanced portfolio using 12-31-2010 market data. I keep all the Thomson Reuters market data files for research like this. As the 2D comparison shows a buy-and-hold strategy performed badly. In antebellum 2008 the bond fund PTTRX was the second smallest holding at 7.9% of Plan and had the lowest 5yr APR of all the investment options. In the current 401k scan PTTRX is the largest holding at 84.2% and has the highest 5yr APR of all the options.
We all know rebalancing is important but this comparison reminds just how far out of balance no pun intended a 401k portfolio can get in less than 3 years and this 401k does not include company stock AMZN. I hope this reminder encourages plan participants to keep their portfolios rebalanced. I do this most quarters but it required more than rebalancing when the Capital Market Line inverted in late 2008.
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