Everyone's 410k is down. If you don't retire within the next 10 years or need cash within the next 5-7 years, i wouldn't even worry about it. Ride it out. Markets always rebound, this time it's just going to take longer.
If you can wait, then the best thing is probably to forget that you even have a 401k and look at it again in a few years.
It's a freaking AWESOME time to purchase stocks at a discount!!
If you all haven't learned to read financial statements (balance sheets, profit and loss statements) this is the time to start. Just like notlikeyou stated, you want to choose companies with solid financials.
The stock market is very much like some friends of mine, driven by emotion, and not as much by logic.
poison.me 
_Notlikeyou_ 
