I logged in to my 401K account today and was greeted by the following message

Personal Rate of Return from 01/01/2008 to 10/06/2008 is -23.5%

Of course, it could have been worse,  I could have had it all in the stock market.

I've been chatting with co-workers who've only posted single digit percentage loses (i.e. their 401K is down less than 10% this year) and been surprised that every single person in that position had hedged their bets by having a large chunk of their 401K as cash. I remember Joshua advising me to do this a couple of months ago when things started looking bad but I took it as paranoia, now I wish I had listened.

Of course, I'd still have the problem of having to trust the institution that was holding the cash like the guy from the MSNBC article excerpted below

Mani Behimehr, a home designer living in Tustin, Calif., isn't feeling reassured after what happened to WaMu and Wachovia. After he heard the news that WaMu had been seized and sold to JP Morgan, he rushed out to withdraw about $150,000 in savings and opened a new account at Wachovia only to learn about its sale to Citigroup two days later.

"I thought this is the strongest economy in the world; nothing like that happens in this country," said Behimehr, 46, who is originally from Iran.

At least I don't have to worry about living off of my 401(k) anytime soon.

Update: A commenter brought up that I should explain what a 401(k) account is for non-US readers. From wikipedia; in the United States of America, a 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wage paid directly, or "deferred," into his or her 401(k) account. In participant-directed plans (the most common option), the employee can select from a number of investment options, usually an assortment of mutual funds that emphasize stocks, bonds, money market investments, or some mix of the above.

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