Help me manage my 401k

[spinbaby]

I've got one of those 401ks that you can only modify at the end of each quarter and that's coming up soon. Most of the money is in mutual funds that lost a lot of money in the last two years but have now recovered some of it. I see a lot of potential train wrecks coming up in the economy and my inclination is to yank all the money out of the mutual funds and into a guaranteed income fund even though that earns only a tiny amount. However, it's also been pointed out to me by someone who I think knows what he's talking about that our government (thanks a lot, Shrubby) is spending like there's no tomorrow and and that that will almost inevitably lead to massive inflation, in which case stocks are probably a much better investment. We're looking at 15 to 20 years til retirement.

Any opinions?

[ThoughtCriminal]

1. Invest in suffering

At least for the remainder of the * administration, human suffering and fear will be a growth market.

Examples:
Pay Day Loans
Pawn Shops
Guns
Home security systems
Cruise missiles
Pharmaceuticals

[spinbaby]

2. No thanks

I'd rather not invest in the unpleasant. In any case, I only have a choice of about 4 different mutual funds plus a guaranteed income fund. It's not a very advanced 401k.

[notadmblnd]

3. One word

GOLD!

[spinbaby]

4. Not a choice

I only have a choice of mutual funds or a guaranteed income fund.

[Demobrat]

5. Split it 50-50.

Diversify, diversify, diversify.

[RUMMYisFROSTED]

6. *

[Squeech]

7. My advice is worth what you pay for it

But here it is anyway: Preservation of capital should be your main goal.

So don't do the fixed-income investment, because interest rates will have to go up when the treasury has to finance the Smirk deficit by flooding the market with bonds, which will depress the value of the bonds in your 401k. (Unless it's a money market fund; that should be relatively immune.)

If you've got several equity funds available to you, go for the one with the lowest beta (volatility), or the one with the stodgiest, most old-economy portfolio. An S&P 500 index fund should be pretty safe (that's where I've parked most of my 401k money, with the rest in a Europe fund). Something that just bought and held the Dow 30 Industrials might be about the safest thing you could do right now, other than cash hidden under the mattress-- or, like the man says, gold.