The answer is, overwhelmingly, insurance companies peddling high-cost, tax-deferred variable annuities with crappy proprietary mutual fund options and high-risk fixed accounts.

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Indeed, mutual funds that used options for either speculation or hedging from July 2003 to June 2007 showed no sign of market-beating returns after adjusting for risk, according to a working paper by Gjergji Cici, an assistant professor at the College of William and Mary.

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However, in most cases, the financial institution sponsoring the solo 401(k) plan documents will limit the individual investment options to stocks and mutual funds and will also exclude many of the attractive solo 401(k) plan options, such as the loan feature and the Roth contribution component.

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The percentage of families buying such policies began sliding in the 1980s with the proliferation of other savings options such as mutual funds and 401(k) accounts.

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They often include extra loads, wrap fees, 12b-1 fees, and often consist of high expense actively-managed mutual funds or even annuities versus lower expense equivalent fund options.

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It should also bring greater attention to 401k investment options, which are often costly and inefficient active mutual funds.

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Smaller companies may do the same, but are more likely to allow self-direction of investments, allowing the participant to choose among stocks, bonds, mutual funds and other available investments, similar to the investment options available in a self-directed IRA. If investments in the 401(k) are limited, Casey will need to decide whether he prefers to contribute to an IRA, which would provide a broader range of investments from which to choose.

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Additional rules take effect for mutual funds on January 1, 2012 and for debt instruments, options and other securities on January 1, 2013.

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The circumstantial evidence that it is next to impossible to succeed over a long period with this strategy is that you don't see mutual funds with terrific, long-term records that just buy options.

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