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Old 09-25-2016, 11:38 AM
 
30,876 posts, read 36,834,852 times
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Quote:
Originally Posted by snowmountains View Post
Do those target year funds really accomplish their goals? Opinions? Why/why not do you own them? (I don't)
Your first question is too vague. What goals did you have in mind?

In general, some are good and some are lousy, just like anything else. Vanguard, T. Rowe Price, and Fidelity are said to have good ones. Vanguard's have the lowest expense ratios.

Since most people are horrible investors, these funds make a lot of sense. They are "set it and forget it" funds. You buy the fund, keep adding money, and it does the asset allocation for you and adjusts it over time.

Personally, I don't like the idea of my asset allocation getting more conservative with time. I plan on getting conservative right before retirement and then getting more aggressive again after the first 10 years of retirement. Target date funds get more conservative and stay that way, so they don't fit what I want to do with my portfolio. But most people are clueless about investing and find it boring. So they are a good vehicle for most people who don't care to learn about investing (although you should still know the very basics).

I also still like balanced funds, which have a mix of stocks, bonds, & cash based on the opportunities those asset classes provide at a given time. They generally keep the stock/bond mix in a certain range. Some have wider ranges than others. I prefer balanced funds over target date funds as I prefer shopping for assets based on opportunities instead of doing it based on age. The bonds and cash portion of most balanced funds
is high enough to cushion the blow in stock market downturns.

So overall, while not an ideal choice, I think target date funds are still a decent choice if their expense ratios are low and/or they are from Vanguard, Fidelity, or T. Rowe Price.

My favorite balanced funds that are open to new investors:

--Mairs & Power Balanced (Very consistent performance. Small asset base makes it flexible)
--Vanguard Wellington (Consistent and almost as cheap as an index fund)
--Oakmark Equity & Income (holds up well in down markets)
--Dodge & Cox Balanced (2nd cheapest fund family after Vanguard)
--Vanguard STAR (not my favorite, but has a low minimum balance requirement of $1000)
--Fidelity Balanced (Aggressive for the category, but solid returns and cheap)
--Fidelity Puritan (Same as Fidelity Balanced)
--T. Rowe Price Balanced (Also growth oriented like the Fidelity funds, but not as aggressive. But pretty cheap. Not top notch, but a solid option)
--Vanguard Balanced Index (The classic 60% stock/40% bond allocation in one index fund. And of course, it's cheap)

If you can get these in your 401k without having to pay the sales load, they are also worth a look:

American Funds Income Fund of America (R4, R5, R6, or A share classes only): Pairs boring, dividend paying stocks with a fairly large helping of lower quality investment grade bonds as well as junk bonds. It's usually a pairing that works well. Can also own up to 25% in international stocks. Consistently good long term performance.

American Funds American Balanced (R5, R5, R6, or A share classes only): Comes close to the classic balanced fund model. Owns 50% to 70% in stocks and the rest in high quality bonds and cash. Consistently good long term performance--almost exactly the same as Income Fund of America's over long periods of time (10+ years or longer).

Last edited by mysticaltyger; 09-25-2016 at 11:53 AM..
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Old 09-25-2016, 11:40 AM
 
30,876 posts, read 36,834,852 times
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Quote:
Originally Posted by mathjak107 View Post
think about something else they do . after the plunge in 2008 instead of buying stock at cheap prices like conventional funds , depending on your target fund glide path they may be reducing stock and so take little advantage of low prices .

anytime you try to discard what is happening around you and go strictly by age or retirement date results are not likely to be what you expect . i rather see someone just buy a balanced fund rather than a target date fund if they are gun shy
I agree. That's why I like traditional balanced funds better. Within a certain range, they could increase their stock allocations during the market crash whereas a target date fund couldn't do that.
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Old 09-25-2016, 12:25 PM
 
106,182 posts, read 108,140,134 times
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Quote:
Originally Posted by jdm2008 View Post
Im 30 years old so looking for a fund to match the 90 10 mix of the vanguard 2060 fund. Any recomondations. Most of the balanced vanguard funds I see are more conservative.
Im rolling over 2 old 401ks so overall less than 13k. So funds with super high minimums wont work esp if I need a couple funds
at 30 i would totally forget about the 10% in bonds . it accomplishes nothing for you and just takes a bit off your long term gains
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Old 09-25-2016, 12:44 PM
 
30,876 posts, read 36,834,852 times
Reputation: 34467
Quote:
Originally Posted by jdm2008 View Post
I'm 30 years old so looking for a fund to match the 90 10 mix of the vanguard 2060 fund. Any recommendations. Most of the balanced vanguard funds I see are more conservative.
I'm rolling over 2 old 401ks so overall less than 13k. So funds with super high minimums wont work esp if I need a couple funds
Just put it in Vanguard Wellington. I like that it's a bit more conservative. People tend to overestimate how much risk they can handle. Wellington has actually beaten the S&P 500 Stock Index over the last 20 years, with a lot less volatility. It may not beat the index the next 20, but I'm betting it will come reasonably close.
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Old 09-25-2016, 03:59 PM
 
Location: Florida
6,606 posts, read 7,283,379 times
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Quote:
Originally Posted by snowmountains View Post
Do those target year funds really accomplish their goals? Opinions? Why/why not do you own them? (I don't)
I like them for those that do not know what they want to do. Much better to use them than not start saving.

Start doing a little research on investing and branch out a little. If you have a work 401k account your company also provide free financial advice. I would take advantage and learn about investing.
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