No. of Recommendations: 18
What you are asking is if one can time the market. The answer is no, you can't. The first law of the marketplace is that no one can, with any consistency, predict what the market will do in the future...NO ONE....although many smart people have tried.

Now, can you make your 401(k) immune from sharp market sell offs? Sure...hold 100% cash (money market). But the trade off is that you will get almost no growth. Studies have shown that over one's working career, 60-70% of the value of their retirement accounts at the first year of retirement will come from earnings, while 30-40% of these savings will come from the amounts actually saved.

If your 401(k) allows you to pick and choose investments at any time, then from the sound of your question, your greatest concern going forward will be your actions, which will almost certainly be based on the emotions of greed and fear, which means you'll likely sell into market declines and buy late into market expansions...EXACTLY the opposite of what you should do. This is human nature.

Your best alternative is to do what the earlier post suggests: hold a stock/bond allocation and rebalance at regular intervals and IGNORE the broader market moves. If you can't do this, then hire a Fee-Only CFP or CPA who provides investment advisory services to do it for you. And if you can't bring yourself to do this, then consider one of the insurance company "guaranteed" minimum return pieces of crap. I intensely dislike these products, as there is a mountain of important information they are not telling you about expenses, return caps, principal resets and all other manner of tomfoolery....but even these are a better alternative than allowing market hyperbole and your emotions to make your investment choices.

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