401K investors moving out of stocks

New York Times – When Nest Eggs Change Colors :

Yet for the first time since Hewitt Associates began tracking 401(k) accounts in 1997, American workers in February held less than half of their 401(k) money in stocks.

Instead, most of their nest eggs now sit in fixed-income and cash instruments, including stable-value, bond and money market funds, according to Hewitt, the employee benefits consulting firm. The proportion of 401(k) money in stocks fell to slightly less than 48 percent in February, down from 53 percent at the start of the year and 69 percent in 2007.

There was a mentality that stocks would give you an 8% annual return forever, and it just ain’t so. Stocks never were the safe, predictable investment for the masses they were made out to be. It looks like some people are realizing it and adjusting their portfolios accordingly.