DISCLAIMER: THE FOLLOWING "RULES TO PROTECT YOUR 401(K) BY TERRY KEENAN" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "RULES TO PROTECT YOUR 401(K) BY TERRY KEENAN" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

As the Enron blame game moves into overdrive in the nation's capital, America's 51 million individual investors should take a time-out to look at what the Enron debacle tells us about our investing discipline and where our 401(k) plans might be headed from here.

The spectacular demise of Enron has become front-page news in recent weeks, but believe it or not the $75 billion in market value lost in the Texas trading titan was far from the biggest black hole investors encountered in 2001. Five other Fortune 500 companies topped Enron as value-vaporizers in 2001: including Cisco, Merck and EMC. All told $2.5 trillion in market value disappeared from investors' pockets in 2001, much of it from our retirement accounts.

In the case of Enron, the speed and finality of the wealth wipeout obviously makes it stand out. So too does the real possibility that fraud in the executive ranks contributed to the death spiral. It is the job of federal investigators to look into that, and prosecute Enron's top guns if necessary.

But the thousands of investors who bought into the "Enron miracle" need to do some soul-searching of their own. While few foresaw the looming Enron train wreck, disciplined investors applying the oldest, simplest rules of investing would have realized something was way off track.

Rule #1: If it looks too good to be true, it probably is. At the height of the Enron love affair most Wall Street analysts admitted they didn't understand how Enron made its money. Stick with Warren Buffett's advice: if you don't understand it, don't buy it, period.

Rule #2: Follow the insiders. Enron executives began selling heavily (8 million shares) back in 2000. If the smart money is voting with its feet, you should too.

Rule #3: Valuation does matter. At its peak Enron shares were trading at 50 times earnings — a laughable level for an energy company, a price just as rich given what it really was: a hedge fund in drag. Even if Enron's books were not cooked, valuation would likely already have caught up with reality.

Rule #4: Use stop-loss orders to limit your losses. The unraveling of Enron took one full year. This easy step would have protected against a lot of downside risk even if you didn't follow rules 1 through 3.

Unfortunately, Enron employees who were prohibited from selling their matching grants until they reached a certain age, and who were locked out from selling for several weeks last autumn, couldn't always make these rules work for them. But it would be foolhardy for the federal government to use Enron's abuses as a reason to now limit 401(k) investment choices for all Americans.