Let’s say you feel pretty confident in your ability to understand the stock market. Maybe you have an account separate from your 401k where you dabble a bit and you’ve done well. Then a self directed 401k might be right for you.

As the name implies, a self directed 401k plan allows you, the employee, to manage your money within the fund. This is either the best option ever or the worst idea in the world. And it all depends on your ability to assess the market. Not every 401k plan allows for self direction in this way. In the last decade it has grown in popularity, but the current volatile nature of the market makes this less attractive to the average investor. On the other hand, if you can take a little risk and you can do your homework, it could be a great way to get some wonderful deals on solid stocks.

So, is it the right move for you? There are a couple of important questions to answer and answer honestly. First, do you have a 401k? Self directed accounts have to start somewhere and if you don’t even have a basic 401k account, you’ll be starting this account with zero money. Next, do you want high risk with the chance of high reward? If you cannot honestly answer yes then don’t do it. Self directed accounts have a higher chance of losing money, but they also have a higher chance of making money and the deciding factor is you. Too much pressure? Who cares if your buddy is doing it and telling you he’s making a killing. That’s his money and his business. Next, have you explored the fee structure within your plan? Self directed plans, whether they are self directed Roth 401ks or the general variety, all have higher fees in comparison to a standard 401k account.

Opening a self directed 401k could be a smart move for you if you have time — time to research the market and time to weather some ups and downs within the market. A self directed account is perhaps not the best move for a 55 year old who wants to retire in 10 years. But, on the other hand, if you are 25 and you can have the discipline to do the homework, yeah, hop in and try it out. The rewards could outweigh the risks.

One last word of caution: do you have patience? People can easily burn up a portion of their nest egg on transaction fee by chasing after a score. If you have patience and discipline to research stocks, pick a few to try and wait a year or two or three and see how they pan out, then this sort of account could be just right for you. If, on the other hand, you find yourself reading the stock tips every day and agonizing over the price of gold, it’s probably better for you to leave your 401k account alone and make a separate account to play around with.