Before any one decides to start investing in the 401(k) plan, the first thing you should do is realize that it will be a long term decision. It's not like a savings account where you just cash it in and spend it when you want. The penalty for withdrawing your money before retirement is substantial.
Therefore, your first step before opening a 401(k) account is to save 3 - 6 months of living expenses in an emergency fund. During that time, learn to budget and stick to the budget. Also, take that time to read and learn how the markets work.
A second thing is, markets go up and markets go down. Don't transfer out of a fund just because the market is down, instead buy in at the lower prices. You're supposed to be looking long term down the road, and odds are the market will recover.
The way I read helenofcalifornia is she already had a large sum invested and wanted to preserve her nest egg by moving it to the SV fund. She is hedging against a further decline in the market. I think she doesn't mind missing the first 5 - 10% of a market recovery if it gives her peace of mind.
She didn't say whether she is still making contributions to her 401(k). If she is, then her new contributions should go to the S&P type funds which would be dollar cost averaging at lower share prices and would lower her cost basis for her entire portfolio when she feels more confident in the market and decides to move her money from the SV fund.
FAVREFAN, on the other hand, is a little more aggressive and is looking at the lower share prices as bargains. Not a bad move. His advice IS good advice.
