I'm about to start a new job and the company offers a Roth 401(K) with a 10% employer match. I plan to only work this job for two years before leaving to go back to school. Should I be conservative in my asset allocations in this account because realistically my investment horizon is pretty short (again, only talking about this account). Conservative is relative here obviously but I mean conservative based on whatever my risk level is?
My rationale is because my time horizon for this account really is pretty short, only a couple of years. When I leave the company in a couple of years I want to roll my 401(K) into a IRA, also roth. Example: If I put most/all my 401(K) funds into riskier investments like the stock market, small caps, whatever, and the stock market drops 30% right before I do the roll over I basically have to sell my 401(K) at a low point. My horizon in my IRA is a lot longer so the drop doesn't bother me, but in my 401(K) I basically want to have this money available in a short time span (a couple of years) to put it into my IRA.
Yes if the stock market or whatever risky investments I could choose keep climbing over the next couple of years I would miss out on those gains, but I don't know what they'l do in the future.
More info: Ryan said in the comments that I should think about if two years turns into a lot more. My employer's match is 20% vested after 1 year, 40% after 2 years, up to 100% at 5 years, so I guess one thing I could do is invest my employer's match in riskier investments and my personal contributions in something less risky. Then if the riskier assets bomb and I leave after two years I still have all of my contributions and some free money from my employer, but if the market keeps rising and I stay for longer, I still have all of that growth once I'm more vested.