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Originally Posted by mathjak107
i find the target funds work best if the money is put in all at once. they dont work well if your going to dollar cost average in. since markets rise 67% of the time and are only down 1/3 you will be buying in dollar cost averaging at usually higher and higher prices while at the same time the funds usually cutting stock allocations too as time goes on. end result is you usually will end up much more conservative then you may want to be if you dollar cost average in.
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I don't understand this argument. The Target Retirement funds do get more conservative as they approach their target date, which is what you want to do to lower risk of a big drop in your retirement funds balance. You know how conservative (what mix) the fund will be at this date, it's in the prospectus. The stock/bond ratio is set according to how far away you are from your target date, and is reballanced automatically. I don't see how this is any different that buying the underlying index funds individually and moving to a more conservative mix/reballancing manually. I don't see the downside of DCA into one of these TR funds. Maybe if you could provide an example with numbers it would be clearer? Thanks.
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