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A fan of the Tampa Bay Rays holds up a sign which reads "We traded our 401k for Rays Tickets" against the Philadelphia Phillies during game two of the 2008 MLB World Series on October 23, 2008 at Tropicana Field in St. Petersburg, Florida.
The stock market is down and, increasingly, people anxious about retirement are day-trading the mutual funds in their 401 (k) plans. The fund industry says it’s a risky practice that raises the cost for other investors, but advocates trade stories of beating the S&P 500 by 15.2 percent.
Still, most people without the time or the know-how are more than happy to follow the “set it and forget it” mentality and only 15 percent of investors made any change to their 401 (k)s last year. But with more baby boomers nearing retirement, analysts predict this trend may increase. The average 60-year-old in the U.S. has only $114,500 in his or her 401 (k), and half have less than $37,300.
If you’re near retirement or just thinking about it, are you considering day-trading your 401 (k)?
Peggy Collins, personal finance columnist, Bloomberg News
Rick Schmitt, a former retirement plan consultant and author of “401(k) Day Trading: The Art of Cashing in on a Shaky Market in Minutes a Day”; he’s also an adjunct professor in the School of Business at Golden Gate University