What should I do about a 401k that isn't doing so well?

I currently contribute 6% of my paycheck to my 401k (with a company match of 4%). Since I am only 25, I have opted to use a "moderately risky" approach to investing my money, but with the market doing as badly as it is, I am losing an average of 2% each week.

My problem is: should I keep my money where it is and wait for the market (and my returns) to improve? Or should I put my contributions into a safer investment? I feel as though the "safe" investments don't return enough in the long run for me to live comfortably in my retirement, so I'm hoping my risky approach will benefit my in the long run.

Any advice would be appreciated!

moderately risky means that in down markets you'll lose a little more and in up markets you'll gain a little more. You have to be willing to accept the losses in order to get the gains. If you start trying to time the market then you'll end up costing yourself money as you will be doing what you are thinking about doing...selling low and then buying high. If you keep putting money in according to your risk assessment...you'll achieve the intended results...OVER TIME!!! You have to let the market work for you and do not attempt to time it. Please keep in mind that long run isn't 3-6 months or even 3-6 years....just be diligent and smart about your choices and you'll be ok. Smart means don't double up on funds in same sector thinking you are diversified....

Market has turned a little, so don't overreact
I like to invest in Asia where the future is as far as making money (I put another $20,000 back into it today)
Your young, you can take more risk than me, you also have the benefit of dollar cost averaging,

This is a Model asset mix for my age group (40), it may help you .
5% short term Fixed income
15%fixed income
0%Balanced/asset allocation
40%Large US. Equity
20%Small/Mid U.S. Equity
20%International Equity

commoditys like silv,gld,dba,moo, are safe and nice return

It is called Dollar cost averaging.

Money is used to buy the fund every paycheck.

If the fund is down, you end up getting more shares at a lower price

If the fund is up, you end up getting fewer shares at a higher price. So keep putting money in that fund, don't take it out yet. It averages out.

Fund Manager Peter Lynch talks about this in his books. He said the primary organ in investing is not the brain, but the stomach. When stocks are down, you stomach wrenches and tells you to sell. If you sell while they are down, you lose money. Always buy low and sell high. If you get out of that fund now, you bought high and are selling low.

You should be putting money in more than one fund.

Put money into large company stock fund, and money market fund, and a fixed income fund.

Avoid funds that combine funds, as they also combine management fees, eating into your gains.

DO NOT WORRY ABOUT YOUR PORTFOLIO LOOSING VALUE IN THE CURRENT MARKET SENARIO! NOW IS THE TIME TO BE PUMPING MONEY INTO THE MARKET!! Now is the time to take that risk!! you are young, or youll have to work all your life. So called moderately risky model portfolios dont have enough international stocks!

(The below calculations are without taking interest =0% because of inflation, and at 0% returns, to amplify a savings problem)
Firstly 6% of your paycheck is way to little to be saving for retirement. Think of it this way, since you save 6% to save a whole months salary in retirement will take you 17(100%/6%) (1.4yr approx)months. So in your case for each year of retirement you would have worked approx 15 years. Working for 30 years would give you 2 years in retirement.

Be a miser and try to push it to about 30% at least 20%.
Since you are working see that you keep 6 months salary in your bank account for unforseen circumstances (job loss, bad health etc). If you have your parents to support you then you can start investing a lot more and gradually build that 6 months balance in your account!
US domestic stocks stock have no hope!! There are quite a few good US listed companies that derive 50%+ of their earnings from emerging markets(Microsoft, Catipillar, Starbucks, Walmart), but they are difficult to pick from. Use large ETF's with High volumes (Dont buy Mutual funds, Managers are overrated)
Forget the US and invest globally and especially in Brazil (EWZ) and Russia (RSX) ETF's. With oil and comodities at all time highs only oil producing countries will benefit, even if the hypothesised Oil investment bubble were to burst, these countries have growing and consuming populations.
Get agressive and stay agressive till your 35yrs, retire with a smile. :-)

There has never been a 20+ year period of time where you would lose money with common stocks. Consider today's market as an opportunity to buy more shares of your 401k funds while they are "on sale." Keep the money where it is.

Hi,
You should look to the long term and you are doing the right thing strategically, however, to get a better picture we should know what you have and what your company is matching. Take a look at a site like www.moneyrec.com. You can post your assets and ask your questions. The site is dedicated to users with this sort of question.

Best of Luck!
Grace

If your investment allocation is sound, you should keep contributing and ignore temporary drops. You are after long-term (several decades) return, so don't be "freaked out" by bear markets.