NEW YORK (CNN/Money) - I have less than a year until I retire and my 401(k) is not doing too well. Right now, I have all my money in the Fidelity Government Income fund and Fidelity Ginnie Mae, but I'm considering putting some in Fidelity Spartan U.S. Equity Index and Fidelity Growth and Income.

On the other hand, I'm wondering if I would be better off quitting my 401(k) and putting my money somewhere safer. What do you think?

-- Charles Pons, Greenville, South Carolina

Before I get to your fund questions, let me set you straight on a few things about 401(k)s. First of all, thinking of your 401(k) as being more safe or less safe than other investments is just plain wrong.

Yes, a 401(k) jam packed with highly volatile tech funds or concentrated heavily in your company's stock may be unsafe. But so would any account invested that way. A 401(k) is nothing more than an investing vehicle, a type of account. It is neither safe nor unsafe on its own. It's the investments you hold in your 401(k) that determine how safe or unsafe it is.

As for your notion of "quitting" your 401(k), employees can't just yank money out of a 401(k) because they want to invest it elsewhere. You may be able to borrow against it or make hardship withdrawals, if your plan allows and if you meet certain government rules about loans and hardship withdrawals. If you switch jobs or retire you can get at your money.

But if you just take the cash, you would owe taxes on the withdrawal. And unless you've retired from the company and are under age 55, you would also owe a 10 percent penalty. Which is why the better course is usually moving the money into an IRA rollover account, where your stash can continue to grow tax free until you pull it out.

Now, about your fund investments. I'm puzzled there too. You say your 401(k) isn't doing too well, yet you have all your money in one fund that invests in government bonds and another that invests in securities that work something like bonds, mortgage-backed securities.

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Over the past two years, both these funds have generated if not "knock your socks off" gains, at least positive returns, which is pretty good considering the bloodbath that stocks have taken. Indeed, Fidelity Government Income was up more than 10 percent for the year-to-date as of mid-November. In short, I would expect you to be celebrating, not crying the blues.

This inconsistency leads me to wonder whether you only recently put your money in Government Income and Ginnie Mae. Throw in your question about moving money to two other Fidelity funds, and I get the distinct feeling that you could be one of these people who likes to jump from fund to fund rather than set a long-term asset allocation strategy and stick to it.

If that's the case -- if you think successful investing is a matter of picking the "best" funds at any given time -- then I'm not sure I can help you.

But if you're open to the idea that the best way to cope with uncertain investing markets is to spread your money among different types of assets that don't all move in synch, then I've got a few suggestions.

First, I suggest you think about creating an overall asset allocation that makes sense given your investing time horizon -- that is, the length of time your money will be invested -- and your tolerance for short-term fluctuations in the value of your portfolio.

Basically, you want to come to a mix of stocks and bonds that makes sense for your situation. The longer your money will be invested -- and even if you're retiring, much of your money will remain invested for many years -- the more you want to have in stocks and the less in bonds. In any case, I don't think your current all-bonds strategy makes sense on any level.

For advice on setting a stocks-bonds mix that makes sense for you, you can check out our Asset Allocation tool or you can check out the Asset Allocation planner at Fidelity's 401(k) Web site.

Besides divvying up your money between stocks and bonds, you'll also want to diversify among different types of stock and bond funds. The two stock funds you mentioned both hold very similar types of stocks -- that is, stocks of large-companies. So I don't think that holding them both makes a whole lot of sense.

I'd be more apt to go with the lower-cost index fund and then look for a fund that provides exposure to mid- or small-cap stocks, and maybe even an international fund.

As for bonds, I think both the funds you now own could be part of the mix, although you might want to consider diversifying into a high-quality corporate bond fund and possibly even putting a smidgen in a high-yield fund. But that's your call.

Once you've set your allocation, you don't want to change it much, other than to rebalance your portfolio's proportions perhaps once a year or so.

After you retire, you can move your 401(k) to an IRA rollover account, but your investing strategy should pretty much be the same -- set your allocation and don't make drastic changes. Any other strategy, especially one involving jumping from fund to fund, would be unsafe, in my opinion.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged." He can be seen regularly Monday mornings at 7:40 am on CNNfn.