Investors On Autopilot, Qualified Women, Etc.

It’s said 401k accounts are making the U.S. an “ownership society.” If so, it’s a peculiarly passive sort of ownership, and one in which many people don’t yet own a whole lot. A report by Hewitt Associates says 401k balances rose an average of 35 percent last year. This put the average balance at about $64,600, “which exceeded 1999 levels for the first time.” But it’s little thanks to active management by workers who have 401k’s. The study says just one-sixth of the workers who contribute to a 401k account “made any form of transfer in 2003.” (The italic emphasis is Hewitt’s.) Rather, most people leave their accounts “on autopilot,” sticking year after year with the asset allocations they started with when they opened their accounts. In more than a few cases, this hands-off policy likely reflects the fact that there isn’t much money there to manage: 22 percent of those who contribute to a 401k account have a balance of less than $5,000. If nothing else, you’d think people would be goaded into action by the spectacle of Enron workers losing their savings because their 401k’s were concentrated in company stock. No such luck. “On average, employees holding company stock had 41 percent of their balances in that investment”; and 27 percent of employees had half or more of their holdings in company stock. Among those 60 and older, 30 percent have a majority of their stake in company stock. That’s one aspect of a more general oddity the study notes: While old workers have a risky skew toward undiversified equities, young workers tend to concentrate their holdings in fixed-income instruments—i.e., investments that aren’t risky but that offer scant growth potential. In a rational world, the correlation of age and risk would be the other way around.

Many children are spoiled, but some are more spoiled than others. That’s one moral to be drawn from a Decision Analyst survey on spending for children’s toys. It finds the average kid gets $276 worth of toys (including video games) per year. Does an only child receive more loot than one with siblings? Not necessarily. Singletons scored an average of $274 in toys, a shade less than kids in two-child families ($286 apiece) and slightly more than those in households with four or more children ($258 apiece). The study suggests that sibling rivalry exerts upward pressure on toy spending in multi-kid households, even though the parents’ resources are spread more thinly. No doubt toy marketers do their best to exploit that factor.

Like symphony orchestras, baseball teams are eager to lure younger fans. So far, no orchestra has dared to give out bobblehead conductor dolls. In baseball, the dolls have become as much a fixture of the sport as steroids. We needn’t be surprised, then, that a family of bobbleheads gets top billing in new spots for the Los Angeles Dodgers. The Bobbles drive to the stadium in their little car, ride up the escalator, graze on a hot dog, get a player’s autograph, etc. In one spot, the Bobble dad enthuses about the stadium as a place where “the sun is always shining and kids still have heroes.” We’ll assume that he’s referring to players and not to bobbleheads. WongDoody of Los Angeles created the spot, with Czar.US as production company.

How come women typically make the purchase decisions for their households? A poll by consultancy Frank About Women has the answer: “Eight-four percent of women in the survey said they were more qualified than other members in their household to act as the Chief Purchasing Officer.” Oh.

For your “Don’t Let Alan Greenspan See This” file: You know the economy is in danger of overheating when American high schoolers’ prom-night expenditures exceed the GNP of numerous countries. A survey by Seventeen quizzed girls age 16-18 who expected to attend their proms. Ninety-four percent of them planned to buy a new dress, at an average price of $195. And, since they can hardly be expected to combine a new dress with an old hairdo, 86 percent said they’d have their hair styled professionally ($52). Sixty percent said they’d buy cosmetics for the prom ($30); 32 percent said they’d have their makeup done professionally ($38). Having built up such spending momentum before the prom, they tend to keep spending afterwards: $38 on dinners/hotel rooms, $30 on “after-prom clothing” and $17 on assorted accessories.

Looks outrank longevity among factors that motivate teenagers to care about their health. A poll by AMP Insights asked kids age 13-18 to cite the main reasons why they want to be healthy. Seventy percent of girls and 56 percent of boys said they “want to be healthy to look good physically.” Fewer—46 percent of boys and girls alike—said they want to be healthy so they’ll live longer. Are there teens who aren’t fixated on their looks? Not many: 6 percent of girls and 17 percent of boys said they’re “neither concerned nor unconcerned” with their physical appearance.

True or false: More Americans worry about their finances now than when the recession began in early 2001. The obvious answer is “true.” However, connoisseurs of counterintuitive data will guess that the correct answer is “false.” Gallup polls that gauge economic anxiety have detected little movement during the past three years. And to the extent there has been a shift in the polls (fielded in April of each year), it has mostly been in the direction of less rather than more worry. The proportion of adults saying they’re “very worried” or “somewhat worried” about “not having enough money to pay your normal monthly bills” was 32 percent in 2001 and 32 percent in 2004. There was similar stability in the proportion saying they’re worried about being able to cover their housing expenses (24 percent in both 2001 and 2004) and in the number worried about being able to make minimum payments on their credit cards (18 percent in 2001, 17 percent in 2004). The chart below gives a picture of opinion on the broader issue of maintaining one’s living standards. Given all the public-policy concern about healthcare costs, the biggest surprise is that fewer Americans are fretting about this matter on a personal basis: 37 percent are now very or moderately worried about being unable to pay for “normal healthcare,” vs. 44 percent in 2001; 47 percent are worried about their ability to handle the costs of care “in the event of a serious illness or accident,” vs. 50 percent in 2001.