You're diligently saving and investing for your retirement, right? If so, at least part of your plan probably includes a 401(k) account. That's good, since 401(k)s can be very effective ways to save -- especially if your employer is chipping in some extra dollars to match part of your contributions.

Still, there's often a downside. Such plans typically offer you only a modest range of options from which to choose where to plunk your money. You may have only a dozen mutual funds, for example. Don't despair, though -- because you may have another option: a self-directed brokerage account (SDA). Also referred to as "brokerage windows," SDAs permit you to invest your 401(k) money in pretty much any stock and in many, many funds. Basically, if your employer offers SDAs, you'll be able to create a special account at the brokerage that manages your company's 401(k) plans, and through that, you'll be able to trade much as you would in a regular brokerage account.

According to a recent BusinessWeek article, companies offering SDAs are growing in number and include Cisco Systems (NASDAQ:CSCO), ITT (NYSE:ITT), and Eastman Kodak. Brokerages that are doing a lot of SDA business include Fidelity Investments, T. Rowe Price, Merrill Lynch, and Schwab (NASDAQ:SCHW). Not all employees are taking advantage of these accounts, and that's OK -- since you should know what you're doing before you allocate your vital retirement assets. It's estimated that between 2% and 8% of those with the option of SDAs at large companies take advantage of them.

What they're buying
So just what might you invest in if you chose to use an SDA? Well, the following list might give you an idea. It's from Business Week and lists the top holdings in Schwab's SDA accounts, which total $13 billion:

  • Microsoft (NASDAQ:MSFT)
  • General Electric (NYSE:GE)
  • Nasdaq 100 ETF (NASDAQ:QQQQ)
  • Cisco Systems

The list makes sense to me in several respects. For starters, Microsoft and General Electric are major blue-chip companies, ones that many people would want in their portfolios. Cisco Systems is another stalwart, though one with a more volatile past. The Nasdaq 100 ETF is a way to get instant exposure to 100 top companies in the Nasdaq market. But ... UAL?? The parent company of United Airlines? Seeing that made me wonder about these SDA participants, considering that airline companies are notoriously troublesome investments. There's an explanation, though: UAL is one of the big companies offering SDAs to its employees, so many of these investors are likely UAL workers, investing in their employer. (I hope they're not putting too many of their eggs in too few baskets, though. That can be a recipe for disaster.)

Don't think you have to follow the crowd, though -- in your SDA, you might opt to invest primarily in significant dividend payers, or in top-flight mutual funds, or in individual companies you've carefully selected on your own.

What to do
If you're now interested in the possibility of investing through an SDA, see whether your employer offers that option. If it doesn't, ask for it.

If you do have the option, proceed with caution. Trade too often, and you'll rack up excessive commission costs. Trade irresponsibly, and you'll erode the value of your nest egg.

Whether you do or don't have access to an SDA, you can still improve your investment results by finding the best brokerage for yourself. Learn how to evaluate brokerages by checking out our Broker Center, and you may end up with one that charges you less than you're paying now. (Did you know that you can find commissions of $5 per trade or lower?) This article on finding the right brokerage may be helpful, too, along with our handy brokerage comparison table.

Schwab is a Stock Advisor recommendation. Microsoft is an Inside Value pick.

Longtime contributor Selena Maranjian owns shares of General Electric and Microsoft. The Motley Fool is Fools writing for Fools.