No. of Recommendations: 3
I agree with Jesse. I'm basically out of the market in my various 401k funds (money market, bonds, stable value funds). I've yet to act on the individual stocks, but will put in some stop orders as insurance very soon.

I definitely agree that the market is as much a reflection of the current investors' perception of the market as it is a straight numbers reading for various companies. There are times when it takes nerves of steel to ride through the rough times. Its best to keep reminding oneself of why they bought the stock in the first place and to provide oneself with various "sanity checks" as touchpoints.

Another factor to grind into calculations is the current investor profiles. I'm guessing (with no certain ideas on how to verify) that the amount of money that is currently in the hands of 401k's is a confounding factor in the equation. 401ks did not exist during the depression or in most of the past gistory of market behavior. So trying to fit this bear market to past occurences is unlikely to shed much light.

There is probably a very complex relationship, with those who just keep contributing through thick and thin offset by both the first wave of baby boomers who see their retirement savings shrinking alarmingly and the GenX folks who have never experienced a severe downturn.

This is going to be very interesting and I'm going to wait most of it out on the safe side.

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