Switch to less risky investments before 401k rollover?

I'm changing jobs in a few months and will rollover a sizable 401k into an IRA. I'm thinking about gradually changing to less risky investments (from stocks to money market) beforehand just in case the stock market tanks before I leave and I will be forced to sell the investments at lower prices. Does this make sense or am I being overly paranoid?

Not being parnoid at all. The market has every indication that it might have formed a double top. Little early to tell just yet, but could be. If so that is not real good news. The fundamentals look somewhat less than promising also especially with the unsettled real estate markets. Since 401k accounts are not subject to tax when switching investments, there is no reason not to play it a little safe if you are so inclined especially if it makes you sleep more soundly at night not worrying whether tomarrow is going to bring another 200 to 400 point drop in the Dow. You can of course also play it a little less risky by switching to a more balanced fund or funds. Sort of half and half so to speak.

Ask yourself what is your time horizon? What is your current allocation and when you move it are you going to use the same asset class split?

Just do a search on "lazy portfolios" for good ideas about a ideal allocation using no load index funds. If you have a 10 year plus time horizon, any downturn now will be just a blip on the overall chart.

If you have less time then, moving to Money Market would be a good move, but plan on a 60/40 split of stocks to bonds when your rollover your account. Check out low cost houses like vanguard and search those lazy portofilos on the internet to get great allocation that work in up and down markets.

Best of luck