Comments on: Why Americans won’t day-trade their 401(k)s

By: Obamageddon

Obamageddon — Wed, 11 Jul 2012 03:49:07 +0000

>>A retirement account is no place for cash
Well, if you had cash in your retirement account in 2008 you’d not have a lot of losses during the collapse.

>> I’m reasonably confident that 99% of their participants — including Lauren Young — will never even attempt it.

This is actually a good thing – day trading is not for everyone.

By: Sir_Douglas

Sir_Douglas — Tue, 10 Jul 2012 19:53:12 +0000

Been trading in my 401 since 2005 – you can get short in a 401K by using etfs based on VIX (beware) or by inverse ETFs of any type – I would not recommend this normally. Getting to cash in volatile time is good enough.

By: fresnodan

fresnodan — Tue, 10 Jul 2012 09:28:42 +0000

“Morgan Stanley employees, who can be assumed to be reasonably sophisticated about matters financial, turn out to be just as path-dependent as anybody else.”

Maybe there just as stupid as everybody else. One thing I have read about LIBOR is that Barclays may not have actually come out ahead, but their traders did (or some of the traders did…teach someone only to hammer and everything is a nail).

We have been obsessed with financial legerdermain for years now, and it has gotten us stagnant incomes and the longest recession in history, and banks that would be bankrupt if not for the belief by central BANKERS that the most important thing in the world is ….wait for it…BANKS. (only hammers…etc)

By: xyz2055

xyz2055 — Tue, 10 Jul 2012 03:23:13 +0000

There are many mutual funds that average 12% annual returns over 10 years. It’s about as interesting as watching grass grow…but the compound is huge. You have to be willing to weather the dramatic highs and lows that temporarily hit the market. But a good basket of mutual funds allows you diversify your investment.

By: billyjoerob

billyjoerob — Tue, 10 Jul 2012 02:53:25 +0000

“you aren’t allowed to sell shares in an IRA before settlement”

Depends on the broker.

By: billyjoerob

billyjoerob — Tue, 10 Jul 2012 02:49:21 +0000

“kind of people who answer the customer-complaints line”

Wow. What “kind of people” would those be, Felix? This is the kind of thing you would expect from the kind of people who write this kind of piffle, I suppose.

By: TFF

TFF — Tue, 10 Jul 2012 01:15:33 +0000

Unless I’m missing something, you aren’t allowed to sell shares in an IRA before settlement — three days later. That strictly limits what I would consider “day trading”.

By: RGWilliams

RGWilliams — Mon, 09 Jul 2012 23:06:07 +0000

“Because you can’t short stocks in a retirement account…”
Oops — you may not be able to short individual sotocks,but you can effectively short various markets through inverse ETFs — e.g., SH, RWM, DOG, PSQ, MYY,SEF,DDG,etc. You can also add leverage to your short position if you so desire — but this isn’t for the faint of heart.

By: Foppe

Foppe — Mon, 09 Jul 2012 22:26:13 +0000

Felix: “But the good news is that we learned, collectively, from the dot-com crash and from the 2008 crisis. Many fewer people, today, believe that they can turn the stock market into some kind of get-rich-quick scheme. And given the enormous obstacles involved in trying to day-trade retirement funds, I’m reasonably confident that 99% of their participants — including Lauren Young — will never even attempt it.”

Huh? Learnt from both the dot-com and housing/assorted speculative bubbles? Sounds like there’s fairly little learning going on if these ‘learning’ customers need two crises in a 10-year period to keep them from being wary. (Though one might wonder what’s up with financial reporting.. I guess they don’t do trend analysis much.)

Anyway, it seems rather more likely to me that people are exiting the stock market because they’re largely broke already, and can’t risk losing what little they have left. 401k privatization is a criminal enterprise, and the day-trading mentality, whenever it is pushed as a strategy normal people should pursue, a huge boon to the banks and stock brokers, who can extract fees like mad, where this was in no way the case prior to that happening.