Many experts believe you should not actively manage your 401k if you are very far from retirement. You are trying to time the market. Your friend is right, you will lose $$ in what you currently hold, but you are dollar cost averaging.
If you really think about it, you want the market to stay cheap, depressed, whatever you want to call it without it becoming apocalyptic, for all the years leading up to say your 50s and then rally like hell leading up to your retirement. Buy low, sell high.
