Regular readers know that I have a great disdain for 401k plans and the mutual funds companies that offer them so whenever an opportunity arises to cash out my 401k from one of these horrible companies I usually jump at the chance.  Unfortunately, I was unable to do so when I left my last employer because the timing was horrible.   Because of extenuating circumstances, I was not able to stay 100% cash while investing like I normally would.  This was a result of poor choices, high fees and market volatility and opportunity that forced me into certain positions.

When I left my employer in January, I was down a significant amount in my portfolio.   To illustrate, I’ve got two diagrams showing the situation:

401kexit

(click for larger image)

So while I didn’t recover 100%, it was close enough to Dow 10k to cash out.   In order for me to recover 100%, the Dow would need to climb up another 15% here and I just don’t see it happening.  As it stands, I’ve actually only lost my employer match which was free to begin with so I consider myself broken even and in 100% cash at this point for this account/money.

While many people have visions of Dow 14,000 now, I am highly skeptical that it will happen.   At some point over the next few weeks, a major correction is more likely than another 1k climb but anything can happen and I’m still seeing a great deal of volatility in the options market.

Gold is out of control, the US Dollar is on the brink, unemployment is high, and the S&P has a whopping P/E of 135+ and it’s like the dot com boom/crash all over again.