While most Americans with 401(k)s or individual retirement accounts embrace a "set it and forget it" philosophy, some anxious retirement savers are getting increasingly aggressive with their investments, according to the Los Angeles Times. Worried about the toll the past decade has taken on their savings, Americans nearing retirement are day trading mutual funds and stock options in a bid to make up for lost time.
Though always considered risky, day trading was popular during the booming 1990s. It fell out of favor when the tech bubble burst, but its resurgent popularity now is driven by boomers who are "close to" desperation, said Jeff Fischer, an options advisor at Motley Fool investment website.
Ten years of a flat stock market bumps up against reality for people in their 50s or 60s who are running out of time to see appreciation" in the stock market, he said.
This includes Vlad Tokarev, 49, who took a major nest-egg hit in the last bear market. "I didn't see a lot of returns using the buy-and-hold method," he told the Times. So these days, Tokarev has taken to day trading the mutual funds in his 401(k) account.
Minutes before the market closes every day, Tokarev buys or sells a mutual fund linked to the Standard & Poor's 500 stock index. His goal is to profit from temporary fluctuations in stock prices, so he buys when stocks are falling and sells when they're rising.
A cottage industry of financial advisers has been preaching the gospel of 401(k) day trading, the Times notes. But most financial planners say this sort of strategy will backfire for investors.
Monday Quick Hits:
- Nobel Prize-winning author has dementia. Gabriel Garcia Marquez, the 85-year-old Colombian writer who won the 1982 Nobel Prize for literature, suffers from dementia and has completely stopped writing, his brother said.
- Barney Frank becomes first congressman in same-sex marriage. The 72-year-old wed long-time partner Jim Ready on Saturday. According to the Washington Post, guests received a faux-campaign button that read "Barney and Jim for Congress" with "Forever" stamped across the word Congress.
- Ringo Starr celebrates peace, love and a birthday. Starr marked his 72nd birthday Saturday by holding a "peace and love" moment with fans, a birthday ritual of his since 2008.
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