This is exacerbated by what's going on in Europe. Countries such as Greece, Ireland, and Portugal have been on the brink for months. Recently, Italy and Spain have seen their borrowing costs soar due to a loss of market confidence. It's a death spiral as higher borrowing costs will make it even harder on their finances. While Germany could bail out Greece, it has little hope of being able to afford the same for huge Italy and Spain... and the leaders there seem to be content to watch their continent burn while they're on holiday. The Euro could very well come undone and we could be seeing years of stagnation. The sad thing is that better decision-making could have helped prevent this.
To bring this home, however, remember the words of Baron Rothschild, an 18th century British nobleman, who said the best time to buy (stocks, whether individually, through a mutual fund or 401(k)) is when there's blood in the streets.