Part 1: Avoiding Cash Holdings in a Retirement Account

Vanguard Group recommends that investors saving for retirement should not allocate any

part of the portfolio to cash (i.e., money market funds). In general, why is this advice

consistent with a long-term strategy?

Under what circumstances should an individual investor hold a significant allocation to

cash in a retirement account? Why?

Part 2: Frequent Trading Restrictions in Retirement Accounts

Frequent trading restrictions are common for employer sponsored retirement accounts.

Why is this requirement consistent with a long-term strategy?

Part 3: Retirement Account Restrictions on Derivatives, Selling Short, or Buying on Margin

A typical employee sponsored retirement program does not permit employees to invest in

currency or financial derivatives or allow them to sell short or buy on margin. What is the rationale for such restrictions on retirement accounts?