Think of this way.If everyone quit putting money into their 401Ks and IRAs,what would happen to stock prices?What would happen to companies?You're seeing an example right now on the DJIA of people pulling their money out of stocks.This will mean companies will have less money to invest in their future,unless you get a big turn around.They are propped up by the stock purchases of the masses,instead of being propped up with their profits.
I'm not saying it's a scam on you or I,but an artificial inflation of a companies worth.That's the scam.
What does it matter if it’s by private individuals or through a 401K fund, though? And, why would a fund be more likely to invest poorly than an average joe? They are pros, they do it for a living, and give many of us who otherwise wouldn’t be able to make as-educated buys of stocks the opportunity to hold good stocks with the risk spread.
I think, if anything, for MOST people, investing through a fund like a 401K fund is a much better choice than self-picking and day trading on a couple of stocks, which is MORE likely, in my opinion, to do what you consider to be the scam of 401K’s in artificially inflating bad companies.