How much risk should a 40-year-old investor take?

Q: I’m 40 years old and employed full time. I contribute $1,200 monthly to my deferred compensation 457 plan. My investment portfolio is allocated based on my age, meaning it’s still pretty aggressive, with a lot of stock funds. The value of my 457 portfolio has fallen into a wretched abyss and my question is: Should I move a portion of it into “safer” territory now, or should I wait it out? I have a good 15 to 20 years until I can retire. I get advice that I should more actively manage my retirement 457 portfolio, but then I’m also stretched thin with small children and professional commitments. The same scenario applies to my kids’ college funds (in 529 plans). One has eight years until college, the other has 12 years.