Booming market lifts 401(k)s but should you relax?

People get nervous when the stock market crashes. They relax when it is high. And it is high.

The market has been reaching landmark highs for months and 401(k)s are loading up on value.

The flip side is what goes up must come down and investors should be checking to see just how invested they are in the stock market.

Quoted by the Associated Press, Fidelity Investments vice president Jeanne Thompson, says you don’t want to wait until the market drops to balance your portfolio.

According to Fidelity, 40 percent of savers who manage their own 401(k) accounts have a higher percentage of stocks than the company recommends.

In fact, from 6 to 9 percent of investors have all their money in stocks.

But, even if the market bulls on running hard, it’s always best to balance accounts with stable investments like bonds.

Bonds aren’t nearly as fun right now because yields are low, but they are stable and that’s a good thing if the market suddenly takes a 10 percent hit. Workers far from retirement can afford to take some risks and ride out the current joyride.

Those within a decade of retirement need their portfolios in 61 percent stocks.

For those 30 years away from retirement, a mix of U.S. and foreign stocks could be as high as 88 percent.

The key is to consider how comfortable you would be with a 10 percent move down in the market.  Then adjust your portfolio accordingly