<prompt> Human: Last night my fiancé came to me with an idea about taking 20k out of his 401k to buy shares of Blizzard with the intent of selling in a few weeks or months. His rationale is that stock prices should go up after two highly-anticipated games are released, after which he could sell his shares. Hes never invested before beyond what his 401k does as default and his current rate of return averages 4 and hes looking for something more in the 10 range. Im not sure if that information is relevant, but he prefaced his idea with it.I only have basic knowledge of stocks but I think its a horrible idea. Just glancing at the stock trends in relation to big game releases, theres nothing to suggest its a good idea short term anyway. Id really like some adviceinformation to help me logically dissuade him. Alternatively, am I overracting? Is this something that is safe to do?edit: Because our conversation wasnt one-sided, here is his side of the storythought process - looks like it got caught in the spam filterAssistant: Youre husband is nuts. Lets do the math.Assumptions: Your tax rate is 25 pretty average He will make 10 annual return very unlikely, not a secret that blizzard has games coming out You are not of retirement age.Option 1 - He doesnt do anything.His 20K after one year becomes 20.8K 4 growthYou cant remove this money until retirement.Option 2 - He invests in BlizzardWithdraw 20K. This faces the 10 penalty, and 25 taxes. This results in 13.5K.While difficult to know exactly how much management fees transaction fees will be, lets assume 100. So your husband is now investing 13.4K. In one year, at 10 this becomes 14.7K. That 1.3K is taxed as a gain, lets say at 10. So, the 14.7K becomes 14.6K.End Results: 14.6K in cashConclusionSo to summarize. If your husbands hunch that Blizzard will grow by 10 is true, he is trading 20.8K in a 401K for 14.6K in cash. What is his plan for the cash? To put it back in a 401K? The 10 growth, even if accurate, is a short term spike. Overall Point to Tell your HusbandEven if you think you can beat the return being generated by your 401K and also IRA, HSA, etc. it is nearly impossible to beat the return by enough to accommodate for taxes and withdrawal fees. The lack of taxes is why these accounts are so wildly popular.Human: His plan is to but it back in a 401k. Other than straight up cashing out, he talked about potentially transferring funds.Hes under the assumption that there is no penalty or tax for transferring to a brokerage link and then transferring it back. From googling the only notable thing Ive seen is that Fidelity or his employer may not allow that or may limit him to only mutual funds. I havent been able to confirm that you can actually transfer money back into the 401k though.  <response>: Yeah, it usually doesnt work this way.He probably could take a loan, which would pay the account 2-6 minus a loan origination fee of 50-1000 - but the payments would be deducted from his take home pay over the term of the loan.So if Blizzard tanks 10 then youre in a situation where youve leveraged yourself to purchase a stock that has gone down in value. Not such a huge deal, but if you needed to pay off the loan quickly like in the case of a lost job, or even to change jobs you two would have to come up with the cash to do it. So, while there are times when it might not be a horrible idea to borrow against a 401k, its a very bad idea in this case. 