With 401(k) accounts booming, what should investors do?

NEW YORK (AP) — Did you notice that your toe doesn't hurt because you didn't stub it today?

We tend to pay the closest attention to things when they're going badly, and the same is true of the stock market. When stocks crashed during the financial crisis in 2008, phone lines for financial advisers and 401(k) providers were jammed with panicky investors. Now stocks are at record highs, and the market is tranquil. It's easy to feel comfortable leaving your account on autopilot.

Don't get lulled into complacency. Stocks may have become an outsized portion of your portfolio following their terrific run.

And don't let the quiet times fool you: Wild swings are part of the market's DNA. Just ask investors who weren't paying attention a decade ago and let stocks build up in their 401(k) accounts as the S&P 500 set record after record, only to see the index get wiped in half by the Great Recession from late 2007 into 2009.

"Now is a good time to check" whether too much of your 401(k) is in stocks, said Jeanne Thompson, a senior vice president at Fidelity Investments. "You don't want to wait until the market tanks, because by that point, it's probably better to ride it out."

Fidelity says 40 percent of savers who are managing their own 401(k) accounts without the help of professional guidance have a higher percentage of their portfolio in stocks than it recommends. That's up from 38 percent a year earlier. Close to 9 percent of male investors and 6 percent of female investors have their accounts entirely in stocks.

Find out how much of your portfolio is in stocks and ask yourself how you'd react to a 10 percent drop in its value, something that's relatively common. If your first reaction would be to sell — and lock in the losses — you may have too much of your portfolio in stocks and not enough in bonds and other more stable investments.

Going back to 1950, investors have had to deal with a pullback of at least 10 percent in the S&P 500 in more than half the years, according to Ryan Detrick, senior market strategist for LPL Financial.

Bonds have risks, too, given their low yields and the Federal Reserve's goal of slowly lifting interest rates higher. But fund managers say bonds should still continue to be more stable in price than stocks.

So what's the right percentage of stocks to hold? It depends on your age and how much risk you're willing to stomach.

People decades away from retirement have the luxury of waiting out any drops in the market. Sinking prices are actually helpful to them, because they make stocks cheaper to buy for anyone regularly contributing to their 401(k) accounts.

Workers closer to retirement still need stocks — albeit in smaller proportions — because they have historically provided the highest returns over the long term and a retirement can last decades.

It's easy to see how much stock mutual-fund companies recommend that retirement savers hold. Check their target-date retirement funds, which are built to help investors divvy up a nest egg over time.

For people 30 years away from retirement, the average target-date retirement fund has nearly 88 percent of its portfolio in a mix of U.S. and foreign stocks, according to a recent review by Morningstar. For those 20 years away from retirement, they keep 79 percent, and the percentage drops again to 61 percent for workers hoping to retire in a decade.

Analysts and professional investors disagree on where the stock market is headed. It could keep climbing as profits for companies continue to increase due to an improving global economy, and as inflation remains low. But stocks are also pricier, raising their risk. In addition, the Federal Reserve is slowly pulling the plug on the stimulus it has pumped into the economy since the Great Recession.

Regardless, make sure that you'd be comfortable with a 10 percent move, up or down, in the stock portion of your 401(k). In the meantime, watch your toes.