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. Today's hot fund is tomorrow's dud. An obvious solution is to charge a fee for trading or restrict trading to once per month or once per week, Metrick said. Many of her clients, she said, permit daily trading.