Tags: Hillary Clinton | Donald Trump | Brexit | 401k

Politifact: Hillary Says American 401(k)s Lost $100 Billion After Brexit

Politifact: Hillary Says American 401(k)s Lost $100 Billion After Brexit
(Photo by Alex Wong/Getty Images)

By    |   Wednesday, 29 June 2016 02:47 PM

Hillary Clinton, the presumptive Democratic nominee for president, said Republican opponent Donald Trump cheered the U.K. departure from the European Union even as the so-called Brexit cost U.S. investors $100 billion.

“The Clinton campaign explained to us how they calculated that $100 billion figure, and experts told us the reasoning was sound,” according to a fact-checking story by Politifact. “The campaign took that March figure for the total value of all 401(k) accounts, $4.8 trillion, and calculated any growth through June 23, the day before the Brexit vote, and then the subsequent fall. They based the growth on changes in the U.S. stock market, as stocks account for about 66 percent of 401(k) assets, and fixed income, which accounts for 27 percent.”

U.S. stocks rebounded and recovered most of their losses with the Dow Jones Industrial Average rising 3.1 percent to about 17,669 since bottoming on Monday. As of 2 p.m. Wednesday, the benchmark was rising to within 350 points from the pre-Brexit level of 18,011.

Trump praised the U.K. referendum to leave the 28-country bloc as a way of regaining freedom from overbearing bureaucracy and centralized government control.

“Voters in the United Kingdom chose to leave the flawed and failing European Union and reassert control over their borders, politics and economy, taking a brave stand for freedom and independence,” his campaign wrote in a fundraising e-mail. “They put the United Kingdom first, and they took their country back. With your help, we’re going to do the exact same thing on Election Day 2016 here in the United States of America.”

Investors shouldn’t panic about the short-term loss, investment advisers told Politifact.

“Spokesmen at 401(k) providers Charles Schwab and Fidelity told us they had received many calls from account holders worried about their assets following the Brexit vote,” the website reported. “They both said they encourage clients to stay the course and remember that saving for retirement is a long-term investment that shouldn’t be irreparably harmed by last week’s market volatility.”

Meanwhile, the case for investing in gold has been strengthened by the Brexit as the fallout may spur the world’s central banks to step up easing, hurting currencies and favoring bullion, Marc Faber, publisher of the Gloom, Boom & Doom Report, told Bloomberg News.

The Federal Reserve may even embark on a fourth round of quantitative easing, or QE4, Faber told the news service. Quantitative easing is when a central bank buys government and mortgage debt from financial institutions in an effort to drive down interest rates.

Faber said he typically buys bullion every month.

“If Brexit is used as an excuse, the central banks will print more money, QE4 in the U.S. is on the way and the depreciation in the purchasing power of currencies will continue,” Faber said. “In that situation, you want to own some gold.”

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Hillary Clinton, the presumptive Democratic nominee for president, said Republican opponent Donald Trump cheered the U.K. departure from the European Union, even as the so-called Brexit cost U.S. investors $100 billion.
Hillary Clinton, Donald Trump, Brexit, 401k
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2016-47-29
Wednesday, 29 June 2016 02:47 PM
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