Assuming your funds are currently invested in stocks: The US equity market is down some 40% from the peak it reached in 2006. We don’t how much of these losses will be recovered by the time you move. At rollover, all your positions will be sold and your paper losses will become realized losses. Therefore, unless the markets have recovered significantly within the next year, you are better off leaving it alone in your current employer plan. You can always roll it over at a later time.

Suppose you have already moved all your 401K investments to cash (i.e money market funds): You can rollover your cash to your new 401K plan or IRA as soon as you are able to. From that point you could move the funds to the appropriate investment vehicles depending on your age and risk tolerance.

Regarding your question on staying with the same fund for 5 or more years, the short answer is not necessarily. If you are moving sideways within the same asset class. i.e. from a large cap equity index fund to another large cap equity index fund, you will reap the same benefits. So, technically speaking, you can make this sideways move anytime. But given the volatility of the markets, it is better to leave your equity investments in your old 401K until it is a suitable time to do some rebalancing.

As for your question regarding reaping the benefits from the stock market, the best way to do that is by choosing the broadest possible index fund, and investing consistently, over a long time horizon. Obviously investment decisions need more careful due-diligence. You should consult a financial planning adviser before making any decisions with your hard earned money.

If you’re likely to roll it over in less than five years, I’d leave it in a money market fund.

In a year, market could be up or down. If you are sure you are leaving, just put it in a money market.

I’d go with an SP 500 index fund.

Even if you can’t keep it at your old company, the market is likely to recover some before the year is out. We’re near the bottom.

You can’t move it into another 401 (k), but you can move it into a rollover IRA.

I’d stay heavy in stocks especially if you’re under age 50.