If you can stand NO MARKET VOLATILITY, then move your money to Fidelity's money markets, and stay there.  We've had a respectable recovery from the low's, and if you want to make a change, now would be a good time. 

Do not move back into the market when it recovers.  Waiting for market corrections & then getting out, and otoh waiting for a market recovery and then moving back in, is a way to lower your returns & increase your risk. 

Move to money markets, and stay in money markets.  You have no tolerance for risk!! 

there is a difference between risk adverse, and risk reduction.

you lose more money being on the sidelines waiting than being in the market, many studies have proven this.

market gyrations, means the ability to buy before the rise.  buying cheap vs buying after a trend is obvious means a loss in $.

diversity is a means to reduce risk,  don't put all your eggs in 1 basket.  Put a dozen eggs in a dozen different baskets.

use morningstar tools xray to look for overlap (risk).

cash loses buying power! 

since it is 401k,  don't take any out!!!

Paul,

Thank you for your reply.

I should have included more information in my post.

I recently left my company.  I am dealing with the emotions of severing my ties with my former (long term) employer, and I don't want to make a big mistake moving my 401k monies.  I could leave my funds in the plan for a while, but the choices of mutual funds do not appeal to me.  YTD losses are running 4 - 13 percent.  I have been told I will need to move the funds sometime in the future anyway.  I was looking for a safe place to park the funds while I find a good investment choice.  Not so much market timing, but me finding the time to find good investments.

 I currently have funds invested in DODFX, FAIRX, ICEUX, SLADX, and PRMSX.  These are after-tax monies.  Now that I am getting into the unemployed mindset, I will definitely spend some time looking for the right investment choices.  Maybe I already have them.  I don't know.  I just read that Fairholme has two new investment managers, and I need to digest what that means.

I am not nearing retirement, but I have worked in the construction field for many years.  While I have a good skill set, the construction industry is depressed and job opportunities are not plentiful.  My concern is to protect my 401k principal as best I can while I put a child through college.

Anyway, I was looking for some help to make sure I don't make an emotional decision that was not best for me or my family.

Again, thanks for your reply.

Tom

Hi Tom,

It seems you have a couple of issues concerning your investments. One is what to do with the 401k in the short term. If you don't want to continue holding the funds you have there, then shift them all to a money market fund within the 401k and then roll the 401k to a new custodian.

However, I would not do the rollover until you have a solid long term investment strategy because you want to be sure that the new custodian offers what you want. For instance you could choose a discount broker or a mutual fund company like Vangaurd, TRPrice or Fidelity. I don't know too much about the discount brokers because I deal mostly with Vanguard, but I'm sure other posters can offer some suggestions if that's the way you want to go.

The point is to have a plan that at least includes the types of funds you will use before you make the move. Doing it this way may save you from making some mistakes that will cause a lot of unnecessary redoing later.

Once you have have chosen a new custodian, then roll the moeny over and park it in a money market fund. Then you can take some time to develop a solid long term investment strategy. 

You need to develop a long term strategy based on your goals that includes your need and tolerance for risk, a matching asset allocation, and careful fund selection which will diversify your portfolio. The idea of jumping out and in the market based on market upsets is not a good plan.  Don't think of your funds in isolation, it's the performance of the overall portfolio that's important. And be sure to include the funds you have in taxable when looking at diversification. 

One last note, the funds you hold in your taxable account, while not terribly tax inefficient now, are not the best choices for taxable.  

Paul 

Paul,

Thanks for the reply.  It looks like I have my work cut out for me.

Also, thanks for the heads-up on my current portfolio.

Tom

I was fased with a similar decision.

here is how I approached the same task.  I used M* to load all the possible funds into a portfolio. I then looked at performance compared to their peers % rank. 

I decided to only invest in the best of the best.  I used the IRA, 401K and taxable account as a single view for all $.  Then I knew my options were limited on the 401K side and picked the best of the best there first.

since I could take the tax hit due to loss of income, the re positioning did create tax issues.

I then looked at funds that pay the highest dividends, and made sure they were on the tax free side of the portfolio.  Next I balanced the portfolio in the style box view, making sure I didn't over load a style compared to past performance.  I kept all fund holdings to less than 10% in a individual fund.

In this manner I think I have a well diversified set of funds.  I have approx. 10% as 'fun' holdings, investing in segments that I think may be hot.

hope this helps.

Thanks.

Since I first posted my querie, I have spent some time learning about the M* tools.  There is quite a bit of information available.  I'm slowly learning more each day.

I will implement your suggestions to build what I think is my right portfolio.  I like your idea of some "fun" holdings.

Tom