Tough to say for sure since we don't know more about your situation. Do you currently have any other savings? Own any real estate?
Going with the assumption that you have no other savings and this is your primary retirement vehicle, I would do the following in your shoes:
- Read this:
http://jlcollinsnh.com/2012/05/12/stocks-part-vi-portfolio-ideas-to-build-and-keep-your-wealth/ - As well as the other articles on his site. Great advice overall.
- I generally keep my savings in two funds the VTSAX (Vanguard Total Market Index) and the VTIAX (Vanguard Total International Market Index) at an approximately 80% - 20% allocation. I differ from the author of the previous website a bit in this aspect as he doesn't keep any investments in International Stocks. I do not keep any investments in bonds currently, but if I were closer to retirement age I would suggest adding
VBTLX (Vanguard Total Bond Fund) which is available in your 401K plan.
- It appears that you may be just starting out as an investor and as such, I would suggest keeping it simple. The closest fund to the VTSAX in your 401K plan is the S&P 500 Index. I would put everything into their until you have a more sizeable sum of money. Again, if you are closer to retirement age you could put 80% in the S&P index and the rest in the Vanguard Total Bond Fund.
- Or you could keep it in the Lifepath fund as others have suggested. That seems like a worthy option as well. The only problem I have with those funds is they general put more money in bonds than I would prefer personally.
- Don't ever pull the money out or try to time the market. Keep investing when the market goes down. By doing this you will be ahead of a vast majority of investors.
These are just my thoughts (And I am definitely not a financial advisor), I am sure others will have different opinions, but in general indexing and diversification are the way to go. This exposes you to a lot of stocks with low fees.