SPY is up 29% YTD.
If you are 100% S&P and not up 28.9% plus your deposits, I'd be concerned — check your fund's management fees.
Are you calling a top?
Proper asset allocation would adjust holding on a regular basis.
At the simplest level, say 70% S&P 30% short term/bond fund.
It's time to re-adjust to the mix that's right for you, and not market-time.
If 2014 sees a huge drop, the re-allocation to 70/30 buys back in at a lower price.
If up again, a bit gets shifted out.
Last, it makes sense for your deposits to match your allocation split, to lessen the divergence from your target numbers.
Note:
Asset allocation is a bit more complex than I just described.
A good thing to research a bit.
(Happy to see someone edit a couple good references here, especially if they aren't looking to offer a full response.)
Here are a few choice questions on this site that are related to asset allocation: What is the best asset allocation for a retirement portfolio, and why?
What is a good asset allocation for a 25 year old?
Should I fund retirement with a static asset allocation or an age based glide path?
Is there an advantage to international stock diversfication?
money.stackexchange.com/users/187/JTP - Apologise to Monica
I recommend that you just leave the 401K where it is - a S&P 500 is a nice simple fund with very low expenses, and over the long term, I think that's a good choice for a 401K.
I don't think it makes sense to put money in bonds at your age.
money.stackexchange.com/users/7282/Eric Gunnerson
JoeTaxpayer's advice is solid - reallocating to your target asset allocation is the right move.
You should have an Investor Policy Statement (IPS) that maps out your financial objectives, risk tolerance, liquidity constraints, etc.
From the IPS, you can determine your target asset allocation and rebalance accordingly.
A few more comments:
It sounds like 100% of your 401k is in US stocks.
You might have other accounts that make your overall portfolio globally diversified, but if not, you want to make sure to set a target asset allocation for a global portfolio.
Your statement "If this were in my brokerage account I'd probably cash out some of the profits and hold onto it and buy more shares as the market eventually comes back down.
But this being a 401k which has semi-monthly deposits from my paycheck, do I just leave it?"
is a bit counterintuitive.
If you are going to try to time the market (a very hard task), it is better to use a retirement account, so you don't have to realize capital gains.
Timing the market is probably a bad idea, but if you engage in market timing, it is probably better to use a retirement account than a brokerage account.
If you would like to tilt your asset allocation based on the market valuation, I recommend researching Shiller's Cyclically Adjusted Price to Earnings ratio .
money.stackexchange.com/users/11067/Powers
You need to look at all your investment as a whole.
The 401K, IRA, and any taxable account need to be a part of the diversification and re-balancing.
The fact you have regular deposits into the 401K needs to also be a part of your strategy.
Regardless of how much specific investments have gone up this year, you need to first determine how you want to be invested in large cap stock, small cap stock, bond, international, emerging markets...
Then you need to see where you are today compared to those investment percentages.
You then move the money in the retirement accounts to get to your desired percentage.
And set the 401K deposits to be consistent with your goals.
Many times the deposits are allocated the same way the balances are, but that is more complex if one of the sectors you are investing in exists completely outside the 401K. When you re-balance in the future you will be selling sectors that grew the most and buying those that grew the least compared to their planned percentages.
If all the moves are within the 401K and IRA then capital gains are not a concern.
Don't think of the different accounts as separate baskets, but think of them as a whole investment strategy.
money.stackexchange.com/users/5414/mhoran_psprep
First, accept the fact that you are not going to be able to predict the ups and downs of the market well enough for that to be a viable strategy.
In the long run these schemes tend to be losers because it forces you to guess correctly twice (When to get out, when to get back in) and missing either date can cost you.
A better strategy to benefit from market volatility: Dollar cost averaging - Invest a fixed amount at regular intervals rather than your opinion of what the market is going to do.
This means you will buy less stock when it is expensive and more when it is cheap.
It is an almost automatic way to follow the seemingly trite advice
"Buy low, sell high".
You are probably already doing this with your 401K Make sure your portfolio is adequately diversified to protect you from excessive risk of a particular sector or economy tanking.
Ideally do this over time in regular fixed dollar amounts for the reasons in my first bullet.
money.stackexchange.com/users/149/JohnFx
I'm 34. 100% of my 401k goes into an S&P index fund.  I'm up about 25% this year.  If this were in my brokerage account I'd probably cash out some of the profits and hold onto it and buy more shares as the market eventually comes back down. But this being a 401k which has semi-monthly deposits from my paycheck, do I just leave it?  Just curious if there's any thought as to what to do with a 401k at this point.
An index fund in my 401k performed very well this year. How to deal with the gains?
money.stackexchange.com
<united-states><investing><401k><retirement>
money.stackexchange.com/questions/27031
money.stackexchange.com/users/836/Jack
You are not going to be able to predict the market enough to make this a viable strategy. It would be better to leave the 401k as it is. Think about your investments as a whole when planning. You are probably not going to be able to predict the ups and downs of the market well enough to have a viable strategy. It is probably best to leave the 401K where it is – as it is a nice  simple  fund with very low expenses. Or you could reallocate to your target asset allocation. A better strategy to benefit from market volatility might be dollar cost averaging. You are actually better investing a fixed amount at regular intervals rather than trying to predict what the market is going to do.
You are probably not going to be able to predict the ups and downs of the market well enough for that to have a viable strategy. It is probably best to leave the 401K where it is – as it is a nice  simple  fund with very low expenses. Or you could reallocate to your target asset allocation. You should probably look at all your investment as a whole, including the 401K. Regardless of how much specific investments have gone up this year, you firstly need to determine how you want to invest and in what sectors. A better strategy to benefit from market volatility might be dollar cost averaging. You are actually better investing a fixed amount at regular intervals rather than trying to predict what the market is going to do.