vanguard target fund

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windsurf

Recycles dryer sheets
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::) As I had posted in the introduction section, I am leaving my law firm after 25 years and need to figure out what to do with my 401k. I am considering putting it into the Vanguard 2015 Target fund which is a ten year stretch to actual retirement. The reason I would pick that target is that I hope to not have to touch those funds for at least ten years. I am looking for any opinions you all have on that plan. I have learned tons from the variety of opinions expressed in this forum and look forward to your comments. 8)
 
Sorry windsurf but I don't like the Target funds as a whole. If you do invest I would make sure you know exactly what the allocation is (and follow it) and make sure it will be appropriate for your needs.

So you are wondering why I don't the Target retirement funds right? I don't like the one size fits all idea. The link below is an article about Target funds and kind of touches on why I dislike them. My nickels worth.

http://moneycentral.msn.com/content/P112441.asp
 
The central difficulty with Target Retirement Funds - is the blinding obvious thing - they work AND THAT IS ALL THAT IS NECESSARY!

All the rest is male and hormonal (incurable human condition). 99% of the MSN money and other financial media is worthless for retirement. After 39 years of reading/watching it's still entertainment although I've followed sports slightly longer.

Buying the appropriate Vangard Target Retirement Series is all you have to do. I did the pie chart based on age dealy 1966-2004.

Don't confuse serious retirement with male hormonal urges.

I have my 15% side money for that. And yes, I can wait for football season- old age I guess - go Saints.
 
The central difficulty with Target Retirement Funds - is the blinding obvious thing - they work AND THAT IS ALL THAT IS NECESSARY!

All the rest is male and hormonal (incurable human condition). 99% of the MSN money and other financial media is worthless for retirement. After 39 years of reading/watching it's still entertainment although I've followed sports slightly longer.

Buying the appropriate Vangard Target Retirement Series is all you have to do. I did the pie chart based on age dealy 1966-2004.

Don't confuse serious retirement with male hormonal urges.

I have my 15% side money for that. And yes, I can wait for football season- old age I guess - go Saints.
Click to expand...

Good post!!! Not sure about the Saints tho :D
 
The one great stock and the Saints in the Superbowl!!

36?? yrs and waiting.

Hope springs eternal.
 
They may work in the sense you will make you money & offer low expenses but I think you can do better in terms of return. Asset allocation for a better return has nothing to do with male hormones. If you don't want to worry about allocation and rebalancing then go with the Target fund.
 
unclemick -

What happens with the Target funds once you reach the retirement date? Do they continue to allocate your assets or is it up to you?
 
unclemick -

What happens with the Target funds once you reach the retirement date?  Do they continue to allocate your assets or is it up to you?
Click to expand...

They continue to allocate for you. On the Saints.......I hope I can watch the Super Bowl from the big screen in the sky because I will be long gone before they play in it. (hope i'm wrong)
 
Hope springs eternal, beyond the grave

I hope I can watch the Super Bowl from the big screen in the sky because I will be long gone before they play in it. (hope i'm wrong)
Click to expand...
On the day after the Red Sox won the World Series, I talked with a woman wearing her grandfather's Red Sox uniform shirt (the kind you buy in a souvenir shop, not the kind you get for being part of the team). As she was the family's second-most rabid fan, he had willed it to her specifically for her to wear when they got to the Series in hopes that they'd win it.

She had tears in her eyes when she told the story. I hope they were for her grandfather, not the Sox...
 
So if Vanguard continues to allocate the assets for you then how is that the best way to go? Some people live longer than others and some people require more money than others. One size fits all to me can be too conservative for some based on the reasons above. You could always change your funds I guess.
 
When I looked at the Target Retirement series I decided to go for the Lifestrategy series instead. Target Retirment increases bond % approaching and into retirement while LifeStrategy doesn't change allocation (except for the Asset Allocation portion which is a managed fund that says it can go anywhere between 100% stock and 100% bond as the manager sees fit). If I wanted to increase bond allocation over time I'd want more direct control of it.

Aside from my personal allocation wishes I have nothing against Target Retirement, and I like the built-in rebalancing (which Lifestrategy also has).

A couple of the W funds are worth looking into as well. I mix them up, but of Wellington, Windsor and Wellesley there are one or two good managed balanced funds. I think I'm in Wellington, but like I say I confuse these funds badly in casual conversation.

By the way, I have two balanced funds because I don't have Lifestrategy available in my 401(k). I also have some additional international index exposure and some REIT index thrown in for variety and to keep my equity allocation higher than the balanced funds provide.
 
One thing that I don't like about Vanguard's
balanced index funds is that the US stock
allocation is either Total Stock Market or Index 500.
Large Cap Value and Small Cap Value are not
represented enough for my taste and rather
short term outlook (age 70). I prefer Wellington
and Wellesley for their large cap value emphasis.
Look at the recent bubble and burst in Large Growth
and Technology to get my drift.

OTOH, I don't think there will be much difference
in loooong term return between Wellington, STAR,
Target Retirement 2025, LifeStrategy Moderate
Growth or Balanced Index (all 60/40 funds).

They are all great funds and will serve you well.

Cheers,

Charlie
 
Thanks to everyone for the sage and, as I expected, divergent advice. I have got a couple of months to ponder this. The 401k is not all but a substantial chunk of the eggs I have in my basket. ::)
 
The central difficulty with Target Retirement Funds - is the blinding obvious thing - they work AND THAT IS ALL THAT IS NECESSARY!

All the rest is male and hormonal (incurable human condition). 99% of the MSN money and other financial media is worthless for retirement. After 39 years of reading/watching it's still entertainment although I've followed sports slightly longer.

Buying the appropriate Vangard Target Retirement Series is all you have to do. I did the pie chart based on age dealy 1966-2004.

Don't confuse serious retirement with male hormonal urges.

I have my 15% side money for that. And yes, I can wait for football season- old age I guess - go Saints.
Click to expand...

Unclemick,

You are 100% correct.

eleighj
 
I agree with charlie...the tsm and s&p500 just dont give one a broad enough exposure to asset classes that have done well or that I expect to do better...reit, value, small caps, energy, etc.

I also dont like them at all at these nosebleed valuations. Anyone who has been in the s&p500 or TSM has stood still for the last 5 years (actually lost money per annum).

If stocks were at a more rational pricing, I'd nod in agreement...from here I dont see anything in a large cap index than downside.

I'll take the dividends and keep my conservative slice and dice for the time being... :-/
 
TH, what is your "conservative slice and dice" comprised of or is that proprietary?    8)
 
Well heck, an easy question...since someone just asked me that a couple of days ago and I still have the PM!

Its about 50% equity, 40% bond and 10% cash and equiv.

taxable

28% wellesley
10% wellington
10% short term bond
10% prime money market
5% high yield corp
3% energy
3% precious metals
3% europe
3% pacific
1.5% gnma

IRA

10% REIT
4% emerging market
3% small cap value
2% international explorer
3% healthcare

Way over-cashed due to just selling my wifes house 2 weeks ago. When I think equities have reached a more reasonable point, I'll commit the $ in the prime money fund into wellesley, wellington or perhaps the ever racy equity income fund (all equity, same managers as wellesley/wellington). If I'm really juiced by lowered valuations, I might even convert some wellesley or wellington into the equity income fund.

Since we're now able to pay the bills and healthcare with my wifes check, I dont need to be so income oriented and conservative...so I may ultimately tip us towards a 70/30 or even 80/20 mix between equity income and short term bond in the taxable portfolio.
 
Just curious TH, but why not DCA into the market a little bit at a time (say 5% a month of the cash you'd like to invest). If I remember from another thread you think the bottom is about a year from now, that spreads you over that time period nicely. That way if it rockets up sooner, hey, at least you were part way in. :) (or if it tanks you haven't put all your eggs in yet). :eek:
 
I could do that but honestly I dont even want to buy a little right now.

I wanna wait for a better deal. Yah, I know, the world is littered with the cast off husks of people who waited for the next correction. If equities werent overpriced by almost any measure and we werent facing continued rising interest rates, I'd be a little more worried about my conservative strategy.

But do remember, we have an income stream that more than satisfies our expenses, and even playing it super conservative theres no way we'll spend all the money we have before we're exceptionally decrepit.

I used to wonder why guys like Bill Gates have such incredibly conservative portfolios when they have so dang much money they can handle a riskier strategy. Simply, they dont have to.

Some day soon I'm quite sure I'll see a price point I can live with and move half my cash into equities. Some time after that I may move the other half.

When prices are more in line, I'll also feel better about indexes and index based life strategy/target retirement type funds.
 
Good point, TH. We are in totally different places, financially. Good thing we have the midnight baby feedings to fall back on for conversation! ;)
 
I am FI and follow th's train of thought too. Currently about 1/3 in equities, 1/3 fixed income+alternative and 1/3 RE and plan to keep that split far into FIRE unless somebody just offers TOO much for any of my real estate! ;)
 
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