Research your investment options. Select your investment options just as you would select any personal investments you make. Gain an understanding of how these securities are managed. Try to diversify between a value style vs. growth style, international vs. domestic. Review the annual past performance numbers to gain an understanding of how volatile they have been and, most importantly, how they perform following a market decline.
Many participants make changes based on past performance.
The decision to move your money around in your 401k should be done based on asset allocation principles. In order words, taking gains from funds that have performed well and reallocating a portion of that money into an area of the market that has not done well, but is positioned positively going forward. Remember that market timing can get you in trouble, especially if you move to cash waiting for the market to recover. By the time market recoveries are recognizable, you've missed out. Past performance is not indicative of future results.