Online communication and administration can cut costs, spark interest in the plan, and provide access to educational planning tools. Frequent trading hurts investors in a taxable account because of per-trade transaction fees and the capital gains tax hit, he said. If I trade five times, I'm imposing the costs on the guy who sits in the cubicle next to me. And I'm wasting time, some of which is work time.
Most financial advisers take a more skeptical view of heavy trading within any retirement account.
Market timing, or investing based on attempts to guess market direction, is a time-consuming gamble that does not pay off over time, they say. When you try and time the market, you miss the significant gains that really matter. Nobody can time the market successfully over the long haul. Most of the gains that occur in the stock market are dramatic gains followed by plateaus. They publish a list of this quarter's best fund, or the best funds for this year.