Market timing and frequent trades within 401(k) plan mutual funds seem to be a thing of the past, according to the Government Accountability Office.
In the early 2000s, federal regulators found patterns of short-term trading abuses in mutual funds, including frequent trading of shares of the same mutual fund to take advantage of temporary disparities in the value of a fund and its underlying assets in the funds portfolio, the GAO report said. Such practices have the potential to compromise the savings of long-term investors, including retirement plan participants who own mutual fund shares.
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