A 401k is just an investment vehicle - an account. Similarly, an IRA is just an account, as is a brokerage account or a savings account at your bank.
What goes into the account is just as - if not more - important as what type of account it is.
What you should invest in - stocks, bonds or money market funds - is entirely dependent on you tolerance for risk:
Your tolerance for risk determines what you will invest in:
So, if you're just starting out, you should invest a large chunk of your retirement money in stocks, with a more moderate allocation in bonds to offset any market volatility.
Every 6-8 years you should adjust your allocations so that more of your retirement savings is in bonds, and less is in stock holdings. Gradually, your bond holdings will become a more significant portion of your retirement savings. As a result, your nest egg will be well shielded from a stock market meltdown because of its significant bond holdings.
You really shouldn't. Not if you diversify properly to begin with.
However, if you're ten years from retirement and 80% of your savings is in stocks, then you should not worry, run.
There is no time to worry: get to a financial advisor and reallocate immediately.
It should have been done years before, gradually, but you really should be mostly in bonds as you approach retirement.
If you're 30 years old and the market tanks, taking with it 50% of your retirement savings, you're young yet. The market will rebound and such a crash may be an excellent buying opportunity.
Bottom Line: Proper asset allocation leads to worry-free investing.