401 KO'd

Diversity wasn't our strength For the first time since their advent 20 years ago, 401(k) retirement savings plans last year lost value, according to a New York Times report. The average account shrank from $46,740 at the end of 1999 to $41,919 at the end of 2000, according to Cerulli Associates, a benefits consulting firm. Personal finance analysts say the nose dive points up a series of flawed investment strategies fostered by the seemingly deathless bull market of the 1990s:

Financial planner Jordan Goodman, author of Everybody's Money Book (Dearborn, Third Edition), says the 401(k) nose dive shows that many people had a limited view of their own risk exposure when they made investment selections. Thou shalt not steal A neurologist, an attorney, and a chiropractor were among 172 people indicted last month in a New Jersey auto insurance fraud ring, according to BestWire, an insurance industry news source. Prosecutors in Hudson County, N.J., say the scam, the largest auto-insurance fraud scheme ever busted in the state, involved 19 staged automobile accidents and millions in bogus medical claims. Bodily injury fraud, often associated with staged or caused car accidents, was among the most common insurance fraud scams in 2000, according to the National Insurance Crime Bureau (NICB), a non-profit research firm. The Hudson County ring allegedly operated an elaborate kickback and referral scheme: According to prosecutors, the neurologist paid the chiropractor for referrals to his office. When fake auto accidents resulted in personal injury lawsuits, the attorney received a share of any settlement paid by insurers. Defendants staged accidents between March 1997 and December 1999 and bilked about 19 insurers, including Allstate and State Farm, out of more than $5 million. According to NICB, insurance fraud costs the average American household from $200 to $300 in higher premiums annually-or about $30 billion each year. Even more temporary Temporary staffing firms employed 2,540,000 employees on an average day in 2000, according to a report by the American Staffing Association (ASA). That's a 4 percent increase over 1999 but a significant decline from the temp industry's average growth rate of 7 percent in recent years. Many economists use the nation's staffing-agency employment tempo as an economic barometer, since businesses can-and do-immediately adjust to shifting market conditions by adding or deleting temporary workers. Demand for temps dipped sharply during the 1990-91 recession, and also in the early 1980s, according to ASA. But during the boom years between 1992 and 1995, temporary help grew at an average annual rate of 20 percent. After 1995, the number of temporary workers increased by an average of only 7 percent annually. ASA attributes the even more modest increase in 2000 to a tight labor market and employers' more circumspect hiring practices during the economic slowdown.