Business
Commentary: Trump wants you to invest your 401(k) in crypto and private equity. Should you bite?
Trump is opening the door to risky ‘alternative investments’ such as crypto and private equity in 401(k) plans. But employers have had good reasons to keep them out of their plans.
If you believe Labor Secretary Lori Chavez-DeRemer, American 401(k) accounts are about to get much better.
Thanks to President Trump’s “bold new vision of a new golden age for America,” Chavez-DeRemer wrote in the Wall Street Journal on March 30, her agency is taking steps to open these crucial retirement accounts to a raft of new investment options, such as cryptocurrencies and private equity funds.
Her goal, she wrote, is to “unwind regulatory overreach and litigation abuse that have stifled innovation.” Her instrument is a proposed regulation that in effect would provide a safe harbor for plan sponsors — that is, employers — to offer those options in their employees’ plans without risking lawsuits or government scrutiny over whether they’re sufficiently prudent for workers to choose.
We have seen a number of proposals from private equity funds where the returns are really not calculated in a manner that I would regard as honest.
— Warren Buffett (2019)
Notwithstanding Chavez-DeRemer’s assertion that this change would be all to the good for workers, the truth is that she and Trump are acting at the behest of alternative investment promoters, who have long slavered for access to the nearly $14 trillion in assets held in 401(k)s and other such defined contribution retirement plans.
Far be it for me to offer anyone investment advice. But there are a few things that Trump and DeRemer aren’t telling you about these proposed new options. Namely, the dangers they present to unwary small investors.
The first clue that something is being hidden appeared in DeRemer’s op-ed, in which she blamed “Washington bureaucrats” and “plaintiff lawyers” for stifling the financial innovation that people supposedly have been clamoring to put in their retirement accounts.
You know who rails against “Washington bureaucrats” and “plaintiff lawyers”? Businesses that are fearful that government regulators and juries will clamp down on their wrongdoing. These critiques are often described as efforts to get government off the backs of the people. What they don’t explain is that once government has climbed off, big business will saddle up.
(As I’ve reported, among the businesses that have recently been demonizing plaintiff lawyers is Uber, which is pushing a ballot measure in California that would all but shut the courthouse doors to some passengers injured during Uber rides.)
So let’s examine the unacknowledged issues with “innovative” alternative investments. Private equity firms are known for buying companies that are either held privately, or are public companies due to be taken private. In many cases, they turn profits for their investors by cutting payrolls and reducing services at their portfolio companies, then draining what’s left until there is nothing left. Cryptocurrencies, as I’ve written, are a scam all their own.
We’ll start with the implicit and explicit rules guiding employers when they decide what investment choices to offer workers in their 401(k)s.
“Employers are fiduciaries, which means they must make decisions about retirement investments that are in their employees’ best interest,” observes Eileen Applebaum of the Center for Economic and Policy Research. “They must be prudent in curating a menu of retirement plan options for their workers. And they have been successfully sued for lack of prudence by workers whose retirement accounts held high fee, illiquid, risky investments that failed to perform.”
The fiduciary standards are developed in part by government bureaucrats. And the successful lawsuits? They’re brought by plaintiff lawyers.
In 2021, the Biden-era Labor Department warned that most sponsors of 401(k) plans and other defined contribution plans “are not likely suited to evaluate the use of [private equity] investments” in those plans. The administration shied away from outlawing such investments outright in 401(k)s. Nevertheless, employers understandably saw the warning as a yellow light, if not a flashing red light.
As of 2024, only about 4% of plan sponsors offered alternative investments, Applebaum reported. The threat of litigation also stayed their hand; 66 lawsuits were filed against plan sponsors that year, according to Encore Financial, a personal finance firm. High fees and other fiduciary failures were at the heart of most of the cases.
This isn’t the first time that Trump has tried to wedge private equity investments into 401(k)s. In 2020, during his first term, then-Labor Secretary Eugene Scalia issued an opinion that the mere presence of private equity investments among 401(k) choice was not in itself a fiduciary violation.
Scalia said his goal was to “remove barriers to the greatest engine of economic prosperity the world has ever known: the innovation, initiative, and drive of the American people.”
Until then, individuals were effectively barred from the investments by a Securities and Exchange Commission rule allowing only “accredited” investors — those who could show annual income of more than $200,000 or net worth of $1 million or more, not including their homes.
I didn’t offer an opinion then about the wisdom of these investments, but wrote only that “if I were inclined to invest my 401(k) money in private equity, I would hope that my family would arrange to have my head examined.”
My reasoning then was that private equity funds produce limited disclosure, or no useful disclosure at all; there are no commonly accepted formulas to measure their returns; and they’re subject to management fees immensely higher than conventional stock, bond or money market funds.
No less an experienced investor than Warren Buffett warned his own shareholders away from the sector, I pointed out.
“We have seen a number of proposals from private equity funds where the returns are really not calculated in a manner that I would regard as honest,” Buffett said at the May 2019 annual meeting of Berkshire Hathaway, which held his corporate investment portfolio.
Since then — indeed, since the Great Recession of 2007-2009 — the private equity sector has been promoting itself as a source of financial returns superior than those of conventional stock portfolios while glossing over cavils such as Buffett’s.
The promoters boast that their funds have low correlations with public markets — that is, when the public markets falter, the private markets gain; that they’re skilled at finding bargains among targeted businesses; and that they impose profit-gaining efficiencies on their acquired businesses.
In recent years, however, the private equity argument has faded. “Current data raises questions concerning these predicate assumptions,” wrote Nori Gerardo Lietz of Harvard Business School in 2024. Private equity fund performance, she observed, has “eroded materially.”
That’s true. From 2022 through the first three quarters of 2025, according to the research firm MSCI, private equity firms turned in annualized returns of 5.8%, while the Standard & Poor’s 500 index of public firms yielded 11.6%. Institutional investors such as public employee pension funds have begun to ask whether the sector deserves their money.
In the last year, the Yale University endowment and the public employee pension fund of New York City have sold off billions of dollars in private equity investments, some at a discount to their stated values. (To be fair, the California Public Employees’ Retirement System, or CalPERS, has remained a fan, attributing its recent improvement in overall returns to a strengthened investment in private equity.)
The doubts being voiced by these major investors has turbocharged the push by the private equity sector to reach into individual retirement accounts. By some measures, however, individual investors have even less tolerance for some of the features of private equity than do institutions. Unlike publicly traded stocks, these investments are illiquid, meaning they can’t be sold at will and they can’t be reliably priced.
As for crypto, the other major alternative investment being touted by Trump, its shortcomings are well documented.
In contrast to conventional stocks and bonds, they don’t represent stakes in anything concrete and as a result are extremely volatile.
Bitcoin, for instance, ran as high as $126,000 in October; as of Thursday it was priced below $72,000. Among other queasy-induced crashes, bitcoin lost 35% of its value in less than four weeks between mid-January and early February, falling from $96,929 on Jan. 13 to $62,702 on Feb. 4.
These are all factors demanding notice from small investors contemplating adding these sectors to their retirement funds. For that reason, some retirement professionals doubt that even the Trump administration’s favor will persuade many plan sponsors to open their doors to alternative investments. Trump’s regulators may be taking a hands-off approach to these sectors, but plaintiff lawyers aren’t likely to back off.
For individual investors, these are sectors that were made for the phrase “caveat emptor.” If you don’t know your Latin, it means “buyer beware.”
Airbnb unveiled a new set of services for guests on Wednesday, adding car rentals, airport pickup and grocery delivery to its online marketplace that connects travelers with local hosts.
Customers can now get groceries delivered to their Airbnb through a partnership with Instacart and have a driver meet them at the airport with Airbnb’s Welcome Pickups. The app is also offering luggage storage in partnership with Bounce and will add in-app car rentals later this summer.
At the same time, Airbnb is ramping up its use of AI by adding AI-powered review summaries and lodging comparisons, the company said.
The company has been expanding beyond lodging since last year, when it introduced Airbnb Experiences and Services, giving guests the option to book private tours and chef-cooked meals through the app.
In an earnings call earlier this month, the company’s chief executive, Brian Chesky, said the company is at “the very, very beginning of how AI is going to change how we all do our jobs.”
The changes are coming in time for the 2026 FIFA World Cup, which will take place in 16 cities across the U.S., Mexico and Canada. The company said its offering exclusive World Cup experiences, such as watch parties and access to stadiums.
“In terms of what we’ve seen in cumulative bookings heading into the event, the World Cup is slated to be the largest event in Airbnb’s history,” said the company’s chief financial officer, Ellie Mertz, on the earnings call.
Airbnb gained popularity for offering travelers unique and homey stays on other people’s property, but it added boutique hotel bookings to its platform late last year. The move had some customers questioning if the app was straying too far from its original purpose.
In its announcement this week, the company said it is partnering with more independent hotels in 20 top destinations, including New York, London and Singapore. On the earnings call, Chesky said hotels on Airbnb could become a multibillion-dollar revenue business.
The San Francisco-based company was founded in 2007 and gave homeowners the opportunity to earn money by renting out their space to travelers seeking something different from a hotel. Airbnb bookings can range from private bedrooms in a shared home to luxury mansions and yachts.
The company’s revenue grew 18% year over year to $2.7 billion in the first quarter, while net income increased slightly to $160 million. Airbnb’s new services and offerings could transform it from a home-sharing platform to a holistic travel marketplace, analysts said.
Shares of the company have increased by 14% over the past six months and fell by less than 1% on Thursday.
Elon Musk wants to take investors on a ride to the moon — and beyond.
His pioneering rocket company SpaceX filed Wednesday for what’s expected to be the largest initial public offering in history, potentially raising at least $75 billion and valuing the company at as much as $2 trillion.
The registration statement with the Securities and Exchange Commission for an expected public offering next month explicitly sets aside stocks for retail investors, though the exact number will be spelled out in a later filing, as will the offering price and company valuation.
Interest in the stock offering is expected to be high despite the billionaire’s controversial politics, including his involvement last year with the Department of Government Efficiency, the makeshift cost-cutting effort that resulted in the loss of hundreds of thousands of government jobs.
“Potential investors are probably just as polarized as the electorate is too, given his dabbling in politics,” said Carol Schleif, chief market strategist for BMO Private Wealth. “But it’s not just the SpaceX IPO per se, it’s a bigger, broader excitement among investors for space investment in general.”
Investor interest was piqued by the Artemis II moon mission this year that SpaceX did not participate in, she said. However, the company is expected to play a larger role in future missions that take astronauts to the moon..
Ultimately, Musk, 54, wants to establish a colony on Mars but those plans have been set on the back burner, with NASA now focusing on moon missions.
Musk will remain the company’s chief executive and chairman. Under a dual-class stock structure as a holder of special Class B shares he will be able to control the election of directors, the filing says.
The IPO is expected to be at least twice as large as the current record holder: Saudi Aramco, the state-controlled national oil and gas company of Saudi Arabia, which raised nearly $30 billion in 2019.
Nearly two dozen banks will be underwriting the IPO and offering shares to investors, including Goldman Sachs, Bank of America and Citigroup.
Founded in 2002 in El Segundo, SpaceX has revolutionized the aerospace industry by developing the reusable Falcon 9 rocket that has radically lowered launch costs.
The company moved its headquarters from Hawthorne to Texas in 2024. However, SpaceX retains large operations in the South Bay city and blasts off regularly from Vandenberg Space Force Base in Santa Barbara County.
Scores of former SpaceX employees have launched startups in Southern California, including rocket company Relativity Space, hypersonic missile startup Castelion and satellite manufacturer Apex Space.
Since developing its reusable rocket technology, SpaceX has established its Starlink network as the leading satellite-based broadband internet service. It also is moving into satellite-based cellular service and this year merged with Musk’s xAi artificial intelligence company that also included his X social network.
Marco Cáceres, an aerospace analyst at Teal Group, said that the advantage of going public for SpaceX lies in the IPO’s ability to raise a large amount of capital quickly to complete development of its Starship rocket.
“It is going to dominate the market even more than the Falcon 9 is dominating the market now,” he said. “That’s going to be ultimately what’s going to drive their business for the next 10 years.”
The 12th test launch of Starship is set for Friday from the company’s south Texas launch facility. The rocket is the third version of craft, standing more than 400 feet tall and with about three times the payload of the second version.
The regulatory filing claims that the market for its rocket, internet and mobile telephone businesses could be as large as $28.5 trillion.
SpaceX also plans to launch thousands of orbiting data centers powered by the sun that would perform AI calculations.
With the company making massive capital investments, it recorded a $4.28-billion loss in the first quarter. Last year, it recorded $18.7 billion in revenue and lost $4.94 billion, according to the filing.
The public offering is expected to hit the market next month after a “road show,” during which SpaceX will seek to drum up interest from institutional and retail investors.
It will arrive after a fairly quiet year for IPOs that was brightened last week when Cerebras Systems, a Sunnyvale company that makes semiconductors for AI supercomputers, went public.
Shares at Cerebras were offered at $185 and jumped 68% on its opening day. They closed Wednesday at $290.69.
Matt Kennedy, a senior strategist at Renaissance Capital, said the SpaceX offering would dwarf that of Cerebras, as it is expected to raise more than every IPO combined in the last two years.
“A win here or a loss could really impact the IPO market,” he said. “The sheer size of this deal is going to make or lose fortunes.”
Among the oddest disclosures of the IPO is a decision by the company’s board in January to grant Musk 1 billion Class B shares if the company reaches a certain market capitalization and establishes a “permanent human colony on Mars with at least one million inhabitants.”
Erewhon opened its newest location in Glendale on Wednesday, marking the luxury grocer’s 14th store in Southern California with more set to open soon.
The new store, located at 520 N. Glendale Ave., includes the chain’s signature cafe and tonic bar as well as an indoor-outdoor patio space.
Known for its upscale, trendy products and high prices, Erewhon has grown into a tourist destination in Los Angeles and a hot spot for celebrities and influencers.
The Glendale location will bring Erewhon staples to trendy consumers in the area, including the beloved Strawberry Glaze Skin Smoothie, which until last year was named after the model Hailey Bieber.
Employees at the store handed out complimentary gift bags and fresh flowers during the grand opening Wednesday morning.
“This location was designed to reflect the spirit of the neighborhood while creating a welcoming space to gather, centered around wellness, connection, and a commitment to the quality standards that define Erewhon,” Erewhon President Josephine Antoci said in a statement.
The company purchased the space, which was formerly a hardware store, in 2024.
Erewhon has locations in several of Southern California’s wealthiest areas, including Calabasas and Beverly Hills. It also has stores in Venice, Manhattan Beach and at the Grove.
“Erewhon’s decision to invest in Glendale reflects confidence in our city’s economic future,” Glendale Mayor Ardashes Kassakhian said in a news release.
The grocer was founded in 1966 by Japanese immigrants Michio and Aveline Kushi — pioneers of the natural-foods macrobiotic movement — who began selling imported organic goods out of their Boston home. In 1969, the company opened its first Los Angeles location on Beverly Boulevard.
Josephine and Tony Antoci bought the company in 2011 and helped launch it to its luxury status with a cult-like following. Tony serves as chief executive while Josephine handpicks much of the store’s merchandise.
By the mid-2010s, Erewhon had become a watering hole for celebrities such as the Kardashians and the Beckhams.
The company has its eye on further expansion. A Thousand Oaks location is slated to open this August and stores in Costa Mesa and downtown Los Angeles are planned for 2027. An Erewhon cafe opened in the Los Angeles County Museum of Art’s new David Geffen Galleries earlier this month.
The Pacific Palisades location, which shut down after the wildfires last year, is set to reopen in January.
The Glendale Erewhon takes the place of Virgil’s Hardware Home Center, which opened in 1932 and closed in 2019.
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