[Dave Ermeling]

I'm wondering if now is a bad time to change my asset allocation. With the economy the way it is I'd like to be a bit more conservative with the funds going into my 401K. Also, If I change my allocation now does it effect the funds already in the 401K?

[ebaines]

If you want to be more conservative, by all means make a change. Best advise is to pick an allocation of stocks, bonds and cash that you are comfortable with for the long term, and stick with it. That's how you buy low and sell high as the market moves through its swings. This assumes that you have a time horizen of ten years or more - if you know you will need the money sooner than that, you may want to be more conservative.

Talk to the plan administrator about how to make the change. You typically have to specify both how you want the existing account balances to be shifted, as well as how future investments should be allocated (the mixes do not need to be the same).