NEW YORK (TheStreet) -- The big debates are right around the corner, the big election is just six weeks away, and the fiscal cliff is just over the horizon. Is it time to just sit this one out for now?

For many, the 401(k) or other tax-deferred retirement plan is absolutely their best vehicle for accumulating retirement dollars.

One can't start early enough to start putting money away. The more one puts away every week, the faster the money will accumulate. Not only is the money going in a tax benefit, but many companies today also do some matching to encourage employee participation.

While a 401(k) can be a great tax benefit and savings plan, it is also vital to keep your 401(k) invested in the right areas of the market and out of the wrong neighborhoods.

For instance, 2011 was very favorable to large-cap dividend stocks and not so kind to small and mid-cap growth stocks. This year is just the opposite: small-caps, mid-caps, technology stocks, biotech, homebuilders, or in other words


, have been the place to be.

This year has not been a good year for investing in those same large-cap dividend payers -- or emerging markets, natural resources, and precious metals for that matter -- more on that in a moment. The worst place one could have their 401(k) invested in 2012 is in stable value or



Let's take a quick look at my current rankings of the various asset classes that one has a choice of investing in:

Data from

Best Stocks Now App

The U.S. dollar started going up in August of 2011 as Europe started to unravel. This spelled doom for the commodity related stocks and emerging markets. These assets like a falling dollar -- instead they got just the opposite.

Now that the Bernanke printing press is working at warp speed once again, the dollar has reversed its upward trend and is now falling once again. This is bullish for the precious metals and the emerging markets are starting to show signs of life again. A new cycle is beginning.

You can see from the screenshot above that this is still very much a risk-on market, with precious metals, small-caps, mid-caps and emerging market debt at the top of the heap. This is good information to know and to stay on top of in coming weeks and months as it relates to your 401(k) allocations. You can follow me on twitter @billgunderson for changes.

Now let's look at the bottom of the asset class pile:

Data from

Best Stocks Now App

When the referee untangles the pile and finds out who is that bottom, he finds inverse funds, the Green Bay safety, and more importantly short-term Treasuries (stable value). Being bearish on the market or sitting on the sidelines in cash has been the

worst place

TheStreet Recommends

to have your money allocated!

I know that your doomsday newsletter tells you that inflation will go through the roof and that you should not touch the stock market with a 10-foot pole, but that has not been very good advice for the last several years. Listening to these doomsayers has been worse than the NFL ref strike-unless you are a Seattle fan.


S&P 500

is up about 16% year-to-date. You have to make hay in the market while the sun is shining. Missing out on a 16% run in the market is a big setback in a 401(k). Furthermore, the


is up almost 22% so far this year and small-caps are up about 15%.

Risk-on has been the place to be. I have kept my followers there for three years now.

How is sitting in cash working for you? I reminded you again back in June of this year that cash was the worst place to be. Did you listen to me?

How about that inflation trade? If inflation was so rampant then Treasuries adjusted for Inflation would be a great investment right now. Let's take a quick look at how they are performing:

Data from

Best Stocks Now App

As you can see, TIPS have gone nowhere over the last five years and have underperformed equities by a wide margin over the last 12 months.

Now, I am not saying that inflation will not rear its ugly head at some time in the future, and I am not saying that what Bernanke is doing is not dangerous; I am just showing you what the market looks like today. If you invest way out in front of a cycle that you think is out there, you can miss out on returns like we are seeing right now.

That can be very costly.

As a professional money manager, I have to take investing one day at a time, one stock at a time, one month at a time, one sector at a time, one year at a time and one asset class at a time.

I also have to be very vigilant for the changing market cycles. I have been fully invested since the S&P 500 low of 666 back in March of 2009. That has been the right place to be. I don't know how you have been invested. As I said earlier, you can follow me on Twitter or you can follow my weekly


for any changes in my current stance.

Just as sure as I am sitting here today, there will be another bear market at some point in the future. Is it time to sit this one out and move your 401(k) to cash or more defensive sectors?

Not yet.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.