401k Conundrum

Several months ago, I began preparing for a precipitous fall in the stock market (because I'm omnipotent -- NOT) by selling a lot of assets and using the proceeds to buy an ETF that shorted the market. I did quite well during the downturn, maintaining my overall capital through the worst of the market fall.

When the government announced that they were going to be investing in banks, I sold a lot of the ETF but I also sold a lot of my other positions.

Here's my conundrum: What do I do with a lot of cash in a 401k plan? I mean, I'm not losing 5 percent every day, but I'm not gaining either. This, coupled with the fact that I think we've got farther to fall, makes me inclined just to stand pat. But I don't want to miss the bottom, either.

The strategy that I think I'd employ if I thought we were near the bottom would be to start picking up individual stocks that had solid, high dividend yields.

What do you think? How has your 401k stood up to this market downturn? Do you think we've hit bottom? Are we on the way back up? Leave your answers in the Comments.

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