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I save my money in target fund too and I have been investing for nearly 35 years. Less headache. I have both TRowprice and Vanguard. I just buy and forget.
While age might play a factor in planning or making recommendations the actual investor and their risk/comfort level is the main driver. Suggesting and equity percentage based simply on age is a sure fire way to accumulate complaints in this business
Low- if you think your telling me something your off- that is why mentioned not knowing individual situation. I'm starting to feel sympathy for you friend.
Low- if you think your telling me something your off- that is why mentioned not knowing individual situation. I'm starting to feel sympathy for you friend.
It's you're not your
And I wasn't telling you so much as pointing it out for anyone who reads it. You don't have any reason or need to feel sympathy for me
You have a number of different needs for money over your life time. Seems that you are started in the right direction but you should start to learn about investments. Look at the educational material Vanguard offers.
You said you maxed out the Vanguard fund. Assume this is in an IRA. Consider a ROTH IRA. You get a lifetime of tax free earnings. You will want tax deferred and tax free retirement assets. You also need investments / savings for non retirement needs.
You need an emergency fund. CD's would be good. Say a 5 year CD. You can cash them in and lose 1/2 or maybe a years interest. Compared to your alternative bank saving account you are still ahead of the game. Look at on line banks.
But CD's are not investments. Investments are for needs that are at least 5 years away and probably 10. You do not want to be forced to sell investments in a down market. Thus cash, bonds (be careful of bond funds) and CD's are for short term needs.
The Target fund is ok, I used them for people like you with little experience. But since you are 24 and interest rates are low I would try and avoid retirement investments that include bonds. I would look more toward equity funds and make up your mind when it loses 50% of its value you are not going to sell. The market goes up and down and the winners are the ones that pick good investments and do not bail out in a down market. Maybe split some of the target fund money for next year into a couple of different funds or maybe a stock you like.
Actually for a most 24 year olds (do not know entire individual situation) would actually be ok with 100% stock portfolio. Obviously need a cash (emergency) reserve account as well.
Most people simply don't have the stomach for a 100% stock portfolio, regardless of age. An 11% bond portfolio isn't really a big difference either way.
Not necessarily for a 24 year old who is putting the money away for 2050 and not drawing from it. With a target date fund the asset allocation changes as the target date nears and appetite for risk declines.
Yes, I know that but it's good enough. The perfect is the enemy of the good.
Quote:
Originally Posted by Big-Bucks
If she wants less stock risk then she could allocate a little more towards a bond index fund.
For people who just aren't that into investing, it's just easier to keep it in an all-in-one fund like a target date fund. Personally, I would prefer she have a balanced fund that varies the allocation within a certain range and changes it based on whether the manager feels stocks or bonds are a better value....but like I said, the perfect is the enemy of the good.
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