Don't Cry For Me Argentina

Megan McArdle does a fine job of defending AOL CEO Tim Armstrong but I fell obliged to nitpick this point about the restructured employer match to the 401(k) program:

For those who haven’t been following along at home, a recap: Last week, AOL Inc. announced that it was changing the way it handled its 401(k) match. Instead of putting the matching money in as workers put in their contributions, it would award the account-match dollars in a lump sum at the end of the year. Moreover, if you left the company during the year, you’d lose all of your matched funds.

...

What he said about the effects of changing the 401(k) match isn’t exactly true, however -- it’s not just people who leave the company who will pay. All the AOL workers who contribute to a 401(k) will miss out on gains they might have made over the course of the year, had AOL stuck with its old program. In a boom year, that could add up to thousands of dollars.

Well, yes, in a boom year it would be financially advantageous to have invested money during the year rather than at year-end. On the other hand, in a down year, such as 2008, the year-end lump sum structure would have saved equity investors some money relative to investing during the year. On the third hand, the stock market has more up years than down years.

And - last hand - I have grave doubts about that "add up to thousands of dollars" claim. Let's consider a highly motivated AOL professional earning $200,000 per year. Per this site, they would have been eligible for a maximum match of 3%, or $6,000:

The company, which owns TechCrunch and, it goes without saying, employs me, matches 50 percent of up to 6 percent of our pre-tax income (or a 3 percent maximum match, for the non math-majors).

So let's take 2013 as a "boom year", with the S&P 500 up roughly 30%. A lump sum invested at the start of the year would grow by $1,800. That is nearly $2,000, so I suppose "thousands" could apply.

But of course, that is not the relevant comparison. I let the OCD take over and dredged up the monthly close of SPY, , an ETF which tracks the S&P 500. An investment of $500/month at each month end from Feb 1 to Jan 2, 2014 would have represented a total investment of $6,000 and an ending value in Jan 2014 of $6,398.43. A $400 return on $6,000 is lot less than 30%; 6.7%, actually.

Now obviously there are possible paths for the market to take that would lead to equal monthly investments showing net growth of 30% by year end. For example, it would be helpful if the market would swoon in Janauary, crater over the summer and then rally heroically late in the year.

However, my guess is that there are not many AOLers earning $200,000 a year and not many examples of a year where the S&P showed that kind of behavior. So this hypothetical loss of "thousands" to some AOL employees sounds like a tremendous longshot.

I should add that Ms. McArdle is hardly alone; here is another account:

2. You miss out on gains. "As a participant, I want the money as soon as possible," says Frank Fantozzi, president and CEO of Planned Financial Services, a Cleveland-based firm that runs retirement plans for 50 companies, all of which deposit 401(k) matches with each paycheck.

"And as an investor," adds Fantozzi, "I want to get the money in the market as soon as I can. Getting the money on Dec. 31 theoretically means you miss out on a year of earnings."

In 2013, for example, when the Standard & Poor's 500 stock index rose 30%, investors that had to wait to get their matching contribution on the last day of the year missed out on huge gains.

"Huge" gains? A 6.7% averaged 2013 return for an employee getting a max match on $50,000 per year would have been $100. If you think that is huge, wait'll you see what I've... oh, never mind.

Comments

[Account Deleted]

"So I can add ecdysiastical research to my CV?"

Beasts,

I'd list a doctorate in Ecdysiastical Studies. After reading RSE's explanation of all the work and effort required to obtain a DEd, I'm sure you qualify.

[narciso]

well one taps the link, before you click, plus it's Kardashian

[NK(withnewsoftware)]

OL-- a man of discerning tastes. The NY Post and UKMail Online are both indispensible daily reading IMO.

[narciso]

Yes, they are, they have fewer tolerance for idiocy, although they do have their blind spots.

[Old Lurker]

Narc's right...I did see "kardashian" in the link as I clicked it. My bad.

[MarkO]

"ecdysiastical" makes it sound like a religious experience.

[narciso]

So Gosnell's gal friday, says she's copacetic
with the 20 week ban, you can trust her, not

[Jeff Dobbs]

OL:
LUN is why I should be more careful about clicking on links.

Also known as..."I clicked a link and it made me miserable. I'd like not to be alone in my misery, so here's the link."

[narciso]

there is something too excessively callipgian you think,

[Old Lurker]

So right, Hit.

Suffer with me!

[peter]

centralcal @ 9:00 the answer: "depends."

[Jim Eagle]

Back to steaks.

When I lived in BA, the story the Argies like tell was that of the top 10 steak houses in the world 7 were in Argentina. And I belived them. One time we took our HQ folks from the States to La Cabrera in Palermo for a typical dinner. One of the items on the menu is called Baby Bife which our smallest visitor ordered thinking it mean't a small filet. When they brought out the 32oz. hunk of prime "jugoso" red meat all the other diners rose and gave him a standing ovation for ordering the biggest steak on the menu. LOL

BTW, if you want to meet other American's in BA then go to dinner in any restaurant that is open at 8pm. Argies don't even think about dinner until at least 10 or 11 at night.

[Jeff Dobbs]

I actually appreciate your method, OL.

There are those who would have taken a much more direct approach of actually embedding a Kardashian pic* directly in this thread as a way to "share" with us.

I'm not naming any names or anything, butt... :)

[Jim Eagle]

Another reason to always read the Daily Mail:

Don't go pissing on Putin's fence

[peter]

OL that is steatopygean, not callypigean and frigging ginormous. You could displace an ocean with that much volume

[Buckeye]

Back in the day. i worked with a sales guy we called the Armenian "rug merchant". A sleazy con artist "wanna buy a watch" kind of guy. Always drove Caddy Sevilles and wore enough gold chain jewelry to outfit a Macy's counter.

Every time I see one of the Kardashians cant't help but think they HAVE to be related.

Ultimate grifters.

[Account Deleted]

I'd suggest JOMers read Trende's piece in conjunction with the Barone piece linked by Clarice while contemplating the San Diego loss by Alvarez in a city which is 35.5% Hispanic or black.

I'm open to suggestions as to what Progressive Democrats can do to mitigate the stench wafting from Obama and his care but whipping the plantations and barrios harder won't cut it and stealing another 1-2% of the vote won't either.

[Old Lurker]

Grifters maybe, Butt you have to admire how they capitalized so well based on nothing butt ugly.

[Saladin]

Ed Kilgore;

"In other words, it's once again premature to read into this development a sea-change in contemporary conservatism or the GOP..........snip

Best I can tell from reading conservative media the last few weeks, the reluctance of GOPers to engineer another high-level fiscal confrontation owed less to the public repudiation of last autumn's apocalypse than to the belief that Republicans are on the brink of a historic midterm victory accompanied by a decisive negative referendum on Obamacare."

Disneyland has many fun venues, especially Fantasyland.
There's a statue of Romney and Fox News with Rove, and they are all celebrating the 2012 win.

[Jane]

"Of course being more conservative than MA is like being smarter than Joe Biden."

Sheesh! How embarrassing and true!

Rick,

All they have is demonization and I expect that on steroids.

[NK(withnewsoftware)]

OL@11:16-- I see what you did there....

[Jim Eagle]

Florida is slowly turning more and more blue in my opinion.

[peter]

not only that but I have always believed that Kardashian hid OJ's knife and golf clubs and is an accessory to murder. but we worship that in our culture

Bowdown.

[Stephanie VIP shhhhh its fight club]

Checking in:

We barely have 1/2 inch of snow and almost no ice at all. So far.

We are shown in the 1/2 to 3/4 ice and 3-4 inch snow colors on their maps so either we have alot more stuff coming or they blew the forecasts for us badly.

[Janet - the districts lie fallow, while the Capitol gorges itself]

Republicans are idiots to ignore the small business owners in the Hispanic community & their pro-family, religious foundations.

You want a guaranteed bump in Hispanic votes?...just run an ad that shows a pitiful-ass, golf cart sized, "green" car & say the Dems want you to drive THIS nonsense. Then show a double cab, black pickup loaded with high end features...& say Republicans want you to drive THIS.

[Old Lurker]

Uh Oh. The yutes are beginning to figure out that they are the marks in the game. Rick was right.

"As a part of the American Psychological Association’s (APA) Stress in America survey, more than 1,000 teenagers and 2,000 adults answered questions about their overall stress levels and coping habits. Though the APA has conducted similar surveys in the past, this was the first to focus specifically on stress among teenagers.

Overall, the survey revealed that 27 percent of teenagers reported feeling “extreme stress” during the school year, compared to 20 percent of adults."

[NK(withnewsoftware)]

The Bottle Blond Davis gives up the game--
20 week Abortion bans are OK, but don't require abortionist hospital affiliation (like you do with cosmetic surgeons). It's all about the $$$ for PP and davis. The Texas Legislature figured out a good way to drive abortioists out of business and cutting down on the money trail to PP and Davis. PP and davis squeal... it's all about the money: http://hotair.com/archives/2014/02/12/wendy-davis-actually-i-support-banning-abortion-after-20-weeks-with-a-few-exceptions/

[narciso]

Ah Robert Costa, remember the backstabbing weasel, has gone on to be Cilizza's understudy at the Fix, who says betrayal doesn't pay.

[Account Deleted]

Jane,

If you count political lawfare such as that being conducted in Wisconsin, then I agree. I'd really like to see an indictment of a Landrieu (any Landrieu, they're all guilty of something) in Louisiana as push back. Trende's analysis is over broad. BOzostench is driving away younger white women who did not attend college, the Lackwitz Sisters are recoiling at a slower rate due to their indoctrination. It's going to take a few more whacks with 2X4s to improve their understanding.

[Ignatz]

Kim didn't land on the Old Man of the Mountain, the Old Man of the Mountain landed on her.

It's gonna need its own walker pretty soon.

[Old Lurker]

Couldn't help yourself, could you Iggy?

[centralcal]

Obviously, all of Kim's clothing has to be tailor-made for her. Nothing comes off the rack proportioned to her. Good thing she is rich.

[rich@gmu]

Iggy for the win...

maybe just bomb the thread until we get a new page.

[NK(withnewsoftware)]

what IS that?

I was told back in the day by bruthas I played football with, that they do love the big cushion.

[Threadkiller]

What happened in San Diego is far more simple than you would expect.

Alvarez is not a seasoned enough crook and Faulkner is.

There are very few differences between the two candidates. I believe Faulkner will do far less damage than Alvarez but he still is all about "fairness", Firefighters, Police, and Teachers.

His climate concerns led him to vote against a power plant that would have spared parts of San Diego blackouts.

When Prop 8 was overturned he tweeted that "today is a great day for marriage equality".

There is no question that he was the best candidate that could win, but I don't think this victory should be considered an overwhelming victory for conservatism.

[Threadkiller]

"Crook" was a little too harsh. I still believe Faulkner isn't what he is being made out to be.

[Miss Marple]

TK, No, but it a victory over Obama, so there's that, which is pretty damn good on the cold winter morning.

[Extraneus]

cc called it early on him.

[peter]

Couldn't help yourself, could you Iggy?

“Here is something that the psychologists have so far neglected: the love of ugliness for its own sake, the lust to make the world intolerable.”
H.L. Mencken

[Extraneus]

(Costa.)

[Ignatz]

Blame OL, for sending me there;
Bruce Jenner's new bouffant.

Funny Jimmy Kimmel video at the link tracing Bruce's transformation into your weird Aunt Bess.

[Jeff Dobbs]

I shoulda gone ahead and named names.

[Miss Marple]

Who is doing Bruce's hair - Johnny Weir?

[NK(withnewsoftware)]

Looks just like Lizzie Warren... is he a fake Indian too?

[NK(withnewsoftware)]

who's 'faulkner'?

[anonamom]

Marlene,
My mom rocked it at my nephew's wedding in a pair of black palazzo pants and a gold colored set with either a short or no sleeve shell and lovely loose long cardigan-type overblouse.

The personal shopper at a store she frequents pointed her in this direction after she had the oh-so-typical shopping trip you described. I 'm getting a pair of palazzos for my next event.

I took the Miss Marple route--found a dress in my closet that I'd bought five years ago for the JEF graduation, and wore it again. Nobody there had seen it except in pictures. And who cares if they had--can't compete with those 20-something girls in Spandex wrappers!

[pagar]

"I'm open to suggestions as to what Progressive Democrats can do to mitigate the stench --"

I don't think this is going to do it.

http://weaselzippers.us/173265-north-carolina-dems-to-nominate-nation-of-islam-leader-to-chair-states-democratic-party/

[NK(withnewsoftware)]

Chaves?-- Kay Hagan must be so thrilled. Does have a real estate broker's license to fall back on?

[Threadkiller]

From the guy who fucked up his ordinance/ordnance joke?

Give me a break.

[Extraneus]

Ohio mom who loathed name can change it to Sexy

NEWARK, Ohio (AP) -- A central Ohio woman who loathed being named Sheila and wanted a moniker that reflected her personality has legally changed her first name to Sexy.

A judge approved the request Tuesday from the 41-year-old Pataskala (puh-TAS'-kuh-luh) woman, formerly named Sheila Ranea Crabtree.

In her application, Crabtree called her given name "the ugliest one out there." She says that if the court didn't allow the switch to Sexy, she'd try to become known legally by her middle name, which she has used for years.

The Columbus Dispatch reports ( http://bit.ly/1aRXCE1 ) that Crabtree told a judge that her husband and teenage daughters approve of the change. When the judge asked why she chose Sexy, Crabtree said she's fun and free-spirited and thought the change would make her complete.

[NK(withnewsoftware)]

OK... you're broken.

Besides it was a 'quip'.

[Threadkiller]

He looks like "successful" George McFly

[NK(withnewsoftware)]

That's the new mayor of SD? does he sell Kias?

[Threadkiller]

More like a 'guip'...

http://www.urbandictionary.com/define.php?term=Guip

[Threadkiller]

Jenner looks like McFly. That is a picture of McFly.

[daddy]

Good Morning.

Glad to hear that DoT's town of San Diego elected a Republican as Mayor over a very heavily financed Dem. Nation Review has the story:

Obama Turnout Machine Crashes in San Diego — Loses Mayor’s Race by Nine Points

I thought this guy's comment was intelligent and wonder if DoT and TK would agree:

oat327 • 13 minutes ago
As a native San Diegan and a Republican, I wouldn't say this is a huge problem with Obama's turnout machine. San Diego is, historically, a conservative city. I think, if anything, Falconer shows how to get strong numbers by running as an intelligent Republican in a centrist/center-right city. He stayed on message. He didn't talk about "legitimate rape" or "libidos." He talked about the big issues facing the city and his conservative solutions, and it worked.

Run intelligently. Address the real problems with real solutions. Be reasonable. Stay on message. That's the lesson for national Republicans. The Obama turnout machine is a beast, and will continue to be--you're doing our side no favors by claiming it's breaking down.

[Jane-curling is on!]

I don't think this victory should be considered an overwhelming victory for conservatism.

No, but if the LIV has trended in that direction, I'm thrilled.

[NK(withnewsoftware)]

If I may-- I agree with that comment. Five years of Obummerism has given conservatives/repubs many targets of opportunity. Run intelligently on those issues and win. Win and then make things better, and win again. My take.

[Danube on iPad]

"Disneyland has many fun venues, especially Fantasyland."

Although he is too craven to make a simple declarative statement about anything, this clown seems to be suggesting that the GOP will not do well in the midterms. Will he say so?

[peter]

This article at the LUN (from Carlos Slim's chimps) seems like just the thing that Tom would start a thread about

[Danube on iPad]

Hallelujah, TK. Orly must be dismayed to see somebody else described as the nirth certificate lawyer.

[daddy]

Since I have to go to work in a couple hours I am making an early call and nominating Kirsten Power's as FOX girl of the day:

Kirsten Powers: ‘I’m Tired of Having to Defend This President’ over Obamacare

[NK(withnewsoftware)]

Peter-- the NYT... what Malthus wasn't available for an interview?

[Jim Eagle]

New Thread in case your tired of this one.

[Beasts of England]

I have an appointment with my ecdysiasticologist this afternoon. It may require some lengthy individual examination - hope it's nothing serious.

I just hope I have enough money to cover my co-pay and deductible...

[Saladin]

http://www.gallup.com/poll/153902/romney-obama-tight-race-gallup-daily-tracking-begins.aspx

Getting giddy about early OR late polling is not wise. The GOP still has that carrion smell from the TP hanging around their necks like an albatross.

Obama is the first Democratic president to win more than 50 percent of the popular vote in a re-election run since Franklin Delano Roosevelt in 1944.

Yet is was neck-and-neck in the beginning as well as the end. That's why Rove was so incredulous and was later seen chewing on the studio rug when FOX went to a commercial. False hope is a conservative given.