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The Rules: Understanding Your 401(k) 27 The most common investments found in 401(k) plans are mutual funds. That's because (and we'll cover this in much greater length in Chapter 11, "The Name Game--Understanding the Different Types of Mutual Funds") mutual funds spread around your chance of losing money (commonly referred to as risk) to several different stocks, bonds, or cash-equivalent investments. Mutual funds can be made available to people inside and outside your 401(k), or they can be made available to only people inside your 401(k). In the latter case, it's technically not a mutual fund, but a separate or individual account. Terms to Know Self-directed brokerage allows you to do just what the name says, invest your hard earned 401(k) money in almost any stock, bond, or mutual fund that can be traded. While you can't buy futures, options, commodities, collectibles, precious metals, or your own company stock in these accounts, you can buy almost anything else. Be careful--just because you can doesn't mean you should! With investments, it's generally wisest not to put all your eggs in one basket. That's why you almost never find individual stocks (other than your company's) or bonds in a 401(k) plan. But some 401(k) plans allow employees to establish a brokerage link through a brokerage firm so that they can invest