I was thinking of a good strategy for investing my 401(k) money and hopefully came up with something. I need to run it by someone who knows a bit about 401(k) before I feel safe implementing it.

Anyways, my plan is to stick with about 6 different mutual funds in my portfolio, all with Morningstar ratings of 4 or 5 and a 5/10 year return of at least 10%. That way I know at the very least the funds have a solid track record. The next part of the plan is to look at the qtd or ytd returns and pick the worst performing funds for that time frame out of the list of 6 mutual funds I chose. The idea is that they are solid mutual funds in the long run but are basically on sale due to their recent poor performance. My thought is I'm not chasing returns by investing in the best performing mutual funds that are already trading at their highs. Instead, in theory, they will bounce back eventually based on their 5/10 year performance and their Morningstar rating. So each quarter or once a year I was planning to change my future allocations to match this strategy. Keep in mind I am only planning on doing this for future allocations, not funds already invested. Another factor you may need to know is my age - almost 30.

So is this a good plan or will I be micromanaging my 401(k) and shooting myself in the foot or am I not making an sense at all?

Thanks in advance for your response

Just not a fan of funds. The 12b1 fee's. etc. You could suffer capital gains in a fund that has a losing track record. I like other avenues.

From the return point of view, it is not bad. But there is a chance of loosing your money there.

I agree you can def. lose money, I think there are safer areas to work with.

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New graduate with an emphasis in debt counseling.

Your only 30. You have plenty of time to ride out the market waves. I think you have a great plan. Buy low, sell high. I'm personally dumping as much as I can into my Roth and 401K while everything is on sale. I don't like paying full price for anything, and that includes investing. The market will bounce back and you will be sitting pretty with more shares worth more money that you bought for a cheaper price. Playing the "let's time the market" game is not a good strategy but more of a gamble in my option. You'll end up missing the turn when things jump back up. If you were closer to retirement, I think it would be a different story.