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Old 05-10-2011, 12:40 PM   #21
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What's not to like ?

Target funds guaranty a diversified age-appropriate asset allocation.

Some here believe that they are smarter than the average bear, and can do better. Their better mix may, in many cases, only be in their mind though.

You could do a lot worse than a target-date fund.
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Old 05-10-2011, 01:06 PM   #22
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I wish they were around 20 years ago.
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Old 05-10-2011, 01:07 PM   #23
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Another advantage is you might feel less responsible if the market goes down and the Target fund loses a little than if you'd suggested a particular mix of funds yourself. With the Target fund, even if you suggested your future SIL use it, the fund managers/computers can be the target of any ire in the event of a loss.
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Old 05-10-2011, 03:43 PM   #24
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I think that they are okay while working. However, some retirees who have the Target Income fund were not too happy with the target fund back in 2008/09. Some of them lost more than they though they should have.
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Old 05-10-2011, 04:03 PM   #25
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A Vanguard Target Fund is an excellent choice, he's lucky to have such a good, low-cost option in his 401K plan.

Later, when he's more interested in learning about investing, he may decide to open additional funds (in after-tax accounts, in an IRA, or within his 401K) to "tilt" his portfolio one way or another. But if he kept 100% of his dough in a low-cost Target Fund he'd be well ahead of the majority of investors who are following the hottest investing trend or an "I know better" advisor/newsletter.
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Old 05-10-2011, 04:25 PM   #26
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A lot depends on the fund. Costs, equity creep in managed funds, and re-balancing too soon are a few of the dangers. I don't trust managed fund families to not use them to hide their mistakes.
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Old 05-10-2011, 04:48 PM   #27
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Quote:
Originally Posted by devans0 View Post
A lot depends on the fund. Costs, equity creep in managed funds, and re-balancing too soon are a few of the dangers. I don't trust managed fund families to not use them to hide their mistakes.


The nice thing about Vanguard Target 2050 fund is that it is made up of:

63% Vanguard Total Stock Market Index Fund Investor Shares

27% Vanguard Total International Stock Index Fund Investor Shares

10% Vanguard Total Bond Market II Index Fund Investor Shares†


By using ONLY Vanguard index funds, costs are kept down, and yet there is the desired diversification. He can always change the target date periodically if desired.
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Old 05-10-2011, 04:51 PM   #28
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Quote:
Originally Posted by LightningDawg View Post
The nice thing about Vanguard Target 2050 fund is that it is made up of:

63% Vanguard Total Stock Market Index Fund Investor Shares

27% Vanguard Total International Stock Index Fund Investor Shares

10% Vanguard Total Bond Market II Index Fund Investor Shares†


By using ONLY Vanguard index funds, costs are kept down, and yet there is the desired diversification. He can always change the target date periodically if desired.
Probably better right now than the traditional "Age in Bonds" allocation.
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Old 05-10-2011, 05:05 PM   #29
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Vanguard Target Fund 2035... not much difference than the previously posted 2050 fund. I'll be watching asset allocation as I get closer to FI.

1 Vanguard Total Stock Market Index Fund Investor Shares 62.3%
2 Vanguard Total International Stock Index Fund Investor Shares 26.6%
3 Vanguard Total Bond Market II Index Fund Investor Shares* 11.1%

Total100.0%
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Old 05-10-2011, 05:32 PM   #30
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Interesting article from CNBC on the pros/cons of Target Date Funds

News Headlines
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