Target date funds....unsophisticated?

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ANKLEDEEP
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Target date funds....unsophisticated?

Post by ANKLEDEEP » Tue Jul 10, 2018 12:37 am

Quick post here....

Myself and my wife are currently maxing out our Roth’s with Vanguard 2055 funds....we are also funding employer matiching accounts, taxable, etc....but wanted to focus on the target date funds.

I recently read a post of a member where they called target date funds “unsophisticated”....I kind of like the idea of not haveing to rebalance or fund multiple accounts each month..... I understand that I am paying a slightly higher fee for this, but am I missing the boat?

Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
Last edited by ANKLEDEEP on Tue Jul 10, 2018 7:49 am, edited 1 time in total.

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unclescrooge
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Re: Target date funds....unsophisticated?

Post by unclescrooge » Tue Jul 10, 2018 12:43 am

You'll be fine in this unsophisticated fund.

Personally, I slice and dice, but my returns may be a tiny bit higher for considerably more work.

When it comes to investing, unsophisticated usually trumps sophisticated strategies.

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Re: Target date funds....unsophisticated?

Post by chevca » Tue Jul 10, 2018 12:47 am

Yes, you are unsophisticated. But the question is, is that a problem? I say, no, it's not.

If investing is about as exciting as watching the grass grow, you're doing it just about right, IMO. :happy

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danielc
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Re: Target date funds....unsophisticated?

Post by danielc » Tue Jul 10, 2018 12:50 am

ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am
Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
I know an investment professional whose job is to advice people on their portfolios. He has his own retirement in a target date fund.

I don't use a targtet date fund myself but that's because I feel that I started saving late and I'm trying to squeeze a tiny bit of extra returns in exchange for a lot of extra work.

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Pajamas
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Re: Target date funds....unsophisticated?

Post by Pajamas » Tue Jul 10, 2018 1:08 am

ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am

I reascently read a post of a member where they called target date funds “unsophisticated”....I kind of like the idea of not haveing to rebalance or fund multiple accounts each month..... I understand that I am paying a slightly higher fee for this, but am I missing the boat?
There is a lot to be said for that. In this case you are not paying much more but you don't have to do anything except make contributions and eventually withdrawals. It is easy to miss rebalancing dates or to succumb to the temptation of edging into timing with contributions and rebalancing. It might even be that investors in target date funds come out ahead of do-it-yourselfers due to the optimization and simplicity, despite the additional costs.

A surviving spouse may not want to deal with rebalancing and some older people have medical problems that lead to poor decision-making. A single fund can lessen the burden of managing finances and avoid mistakes.

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Re: Target date funds....unsophisticated?

Post by mancich » Tue Jul 10, 2018 5:28 am

Nothing wrong with a target date fund, especially from Vanguard. One-stop solution, and beats the pants off most other solutions if you don't want to manage 3-4 funds yourself. :beer

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Re: Target date funds....unsophisticated?

Post by Tamarind » Tue Jul 10, 2018 5:41 am

Who cares if it works for you?

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Re: Target date funds....unsophisticated?

Post by Silk McCue » Tue Jul 10, 2018 6:22 am

Target Date Funds are like my wife's "Little Black Dress". It's not the height of sophistication, but seeing her in it it still makes my heart happy.

Cheers

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Re: Target date funds....unsophisticated?

Post by Grt2bOutdoors » Tue Jul 10, 2018 6:24 am

Sophisticated, sexy, new paradigm - words used by Wall Street and their associates to convince you to part with your hard earned money in exchange for mediocre returns. Now that is “sophisticated”! :twisted:
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Target date funds....unsophisticated?

Post by NotWhoYouThink » Tue Jul 10, 2018 6:55 am

My ex-Schwab rep called my target date fund "plain vanilla" when trying to sell me on Schwab's managed portfolio. So now my funds are at Vanguard.

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Re: Target date funds....unsophisticated?

Post by Ron Scott » Tue Jul 10, 2018 7:13 am

Target date funds, really? If someone posted they changed their AA every year, paid higher fees for investing than they needed to so someone else could manage their investments, invested in funds that unnecessarily manufactured taxable events every year, and set an AA that didn’t really match their personal risk tolerance, the replies would be merciless and the poster would be sent to the Wiki.

But if you explain you committed all these sins with target funds you get a free pass and a pat on the back. OMG...

This is a good thing?
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. Preparing for financial challenges is more fruitful than trying to predict them.

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Re: Target date funds....unsophisticated?

Post by Silk McCue » Tue Jul 10, 2018 7:19 am

Ron Scott wrote:
Tue Jul 10, 2018 7:13 am
Target date funds, really? If someone posted they changed their AA every year, paid higher fees for investing than they needed to so someone else could manage their investments, invested in funds that unnecessarily manufactured taxable events every year, and set an AA that didn’t really match their personal risk tolerance, the replies would be merciless and the poster would be sent to the Wiki.

But if you explain you committed all these sins with target funds you get a free pass and a pat on the back. OMG...

This is a good thing?
A completely unhelpful post. Please don't try to derail this thread with your unfounded bias. You are simply wrong on so many levels but this has been debated ad nauseam on this site and there is no reason to do so here.

Cheers

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Re: Target date funds....unsophisticated?

Post by vineviz » Tue Jul 10, 2018 7:20 am

Ron Scott wrote:
Tue Jul 10, 2018 7:13 am
Target date funds, really? If someone posted they changed their AA every year, paid higher fees for investing than they needed to so someone else could manage their investments, invested in funds that unnecessarily manufactured taxable events every year, and set an AA that didn’t really match their personal risk tolerance, the replies would be merciless and the poster would be sent to the Wiki.
I’d tell such a person to invest in a target date fund and solve all those problems in a single move.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Target date funds....unsophisticated?

Post by Pajamas » Tue Jul 10, 2018 7:22 am

Ron Scott wrote:
Tue Jul 10, 2018 7:13 am
Target date funds, really? If someone posted they changed their AA every year, paid higher fees for investing than they needed to so someone else could manage their investments, invested in funds that unnecessarily manufactured taxable events every year, and set an AA that didn’t really match their personal risk tolerance, the replies would be merciless and the poster would be sent to the Wiki.

But if you explain you committed all these sins with target funds you get a free pass and a pat on the back. OMG...

This is a good thing?
A target date fund in a Roth account (as in this thread) doesn't unnecessarily (or necessarily) manufacture any taxable events at all.

The changing AA could meet their risk tolerance and needs; they are designed to do so, after all.

Most people (yes most) aren't going to actually carefully and rigorously manage even a simple three fund portfolio. Most people are doing well just to contribute adequate amounts to their retirement accounts in the first place.

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Re: Target date funds....unsophisticated?

Post by Dandy » Tue Jul 10, 2018 7:37 am

The TD funds' design is fairly sophisticated but they are simple to use and the extra expense isn't that big a deal. Any choice of a balanced or all in one fund usually requires some compromise e.g. in the overall allocation or the funds included. e.g. I am not a big fan of International bonds but they come with the TD and Life Strategy Funds.

My basic dislike of the VG TD and Life Strategy funds are that once you make yourself comfortable with the overall allocation and funds included VG can, and has, changed both rather dramatically e.g. increased the equity allocation, upped international equity percentage and introduced international bonds to name a few changes. So, you don't really know what you are holding down the line. If held in a tax advantaged account and you keep an eye on it then you can change without tax issues. But, the main purpose many choose a TD or Life Strategy Fund is more of a set it and forget it and go play golf.
You can still golf but need to not be completely be hands off.

If you are a broker you may not like these funds because they don't leave much of a role (or commission) once people buy them. So saying they are unsophisticated is another way of saying you should have lots of investments and I the broker will add value by helping you manage them and get greater results.

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Re: Target date funds....unsophisticated?

Post by A440 » Tue Jul 10, 2018 7:53 am

"Life should be exciting. You're investments should be boring"

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goingup
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Re: Target date funds....unsophisticated?

Post by goingup » Tue Jul 10, 2018 8:01 am

Jonathan Clements wrote about Target Funds recently. http://www.humbledollar.com/2018/07/one-and-only/ He has advised his daughter and sons to use them. He uses them himself in 2 smaller accounts to "keep things simple".

I used TR2025 and 2035 until our accounts got larger and stretched mainly across taxable space. In a workplace plan or IRA they're a fantastic solution, expertly designed and diversified. Calling them unsophisticated is really a mischaracterization.

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Re: Target date funds....unsophisticated?

Post by Nowizard » Tue Jul 10, 2018 8:04 am

If someone invests in a Target Fund that focuses on the investor being five years from retirement with a 40/60 stock/bond ratio, for example, will the investor retain that ratio forever, or does the investor continue to be moved to another retirement fund with more conservative weighting over time?

Tim

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Re: Target date funds....unsophisticated?

Post by WallStreetPhysician » Tue Jul 10, 2018 8:12 am

ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am
Quick post here....

Myself and my wife are currently maxing out our Roth’s with Vanguard 2055 funds....we are also funding employer matiching accounts, taxable, etc....but wanted to focus on the target date funds.

I recently read a post of a member where they called target date funds “unsophisticated”....I kind of like the idea of not haveing to rebalance or fund multiple accounts each month..... I understand that I am paying a slightly higher fee for this, but am I missing the boat?

Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
By using TDF, you’re trading convenience for less flexibility and slightly higher costs. It’s up to you if it’s worth it. Since it’s in a Roth you can quickly change your mind without tax consequences.

-WSP

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Re: Target date funds....unsophisticated?

Post by goblue100 » Tue Jul 10, 2018 8:12 am

Sophisticated is just another word for complex. Insurance firms love to wrap things up in expensive wrappers and market them as sophisticated, while they are just so complex you can't understand how bad they are. I'd say your simple target date fund is just the right amount of complexity.
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Re: Target date funds....unsophisticated?

Post by pkcrafter » Tue Jul 10, 2018 8:25 am

Sophistication has nothing to do with sound investing fundamentals. Aiming for a sophisticated portfolio, whatever that is, seems to fall into the behavioral, ego-feeding category. Taylor Larimore doesn't say aim for sophistication, he says aim for simplicity.
Nowizard wrote:
Tue Jul 10, 2018 8:04 am
If someone invests in a Target Fund that focuses on the investor being five years from retirement with a 40/60 stock/bond ratio, for example, will the investor retain that ratio forever, or does the investor continue to be moved to another retirement fund with more conservative weighting over time?

Tim
If you stay in one TR fund, you won't be moved to another one. A Vanguard TR fund reduces equity allocation over time and reaches an ending allocation of 30/70 seven years after the date of the target fund. So, TR 2015 would be at 30/70 in 2022. If you want to stay at 40/60 use LifeStrategy conservative.

Paul
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Re: Target date funds....unsophisticated?

Post by typical.investor » Tue Jul 10, 2018 8:42 am

Target Date Funds are pretty sophisticated in my view.

Just because they are simple doesn't mean that they don't have research behind them looking at questions of volatility, the impact bond rate changes and currency movement etc.

Target Date Funds (particularly ones that use index funds) are a rather elegant solution to investing I think.

Elegant: (of a scientific theory or solution to a problem) pleasingly ingenious and simple.

Sophisticated: having, revealing, or proceeding from a great deal of worldly experience and knowledge of fashion and culture.

Now just substitute "finance" for "fashion and culture" and by definition Target Date funds are both elegant and sophisticated.

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Re: Target date funds....unsophisticated?

Post by Nowizard » Tue Jul 10, 2018 9:13 am

Thanks, Paul.

Tim

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mhc
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Re: Target date funds....unsophisticated?

Post by mhc » Tue Jul 10, 2018 9:28 am

Everything should be made as simple as possible, but not simpler. - Albert Einstein

I do not believe one should add complexity for the appearence of being sophisticated.
Last edited by mhc on Tue Jul 10, 2018 9:46 am, edited 1 time in total.

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Re: Target date funds....unsophisticated?

Post by Taylor Larimore » Tue Jul 10, 2018 9:32 am

Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
ANKLEDEEP:

Target date funds are designed by mutual fund company experts. They are among the most "sophisticated" portfolios (in tax-advantaged accounts).
Leonardo da Vinci: “Simplicity is the ultimate sophistication.”
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Target date funds....unsophisticated?

Post by Tanman4223 » Tue Jul 10, 2018 9:40 am

ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am
Quick post here....

Myself and my wife are currently maxing out our Roth’s with Vanguard 2055 funds....we are also funding employer matiching accounts, taxable, etc....but wanted to focus on the target date funds.

I recently read a post of a member where they called target date funds “unsophisticated”....I kind of like the idea of not haveing to rebalance or fund multiple accounts each month..... I understand that I am paying a slightly higher fee for this, but am I missing the boat?

Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
Ankledeep,

To be quite frank, you can allow others to label you whatever they want; these are your investments and only you can decide what you need. Target date funds only draw expenses from the underlying funds within them, which tend to be very low (Vangaurd, at least). As long as there are options to match the AA based upon your risk tolerance, go for it if you so choose. I’m using the target date funds for my 401k and Roth IRA. The simplest tools are the ones that are most effective.

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Re: Target date funds....unsophisticated?

Post by BuckyBadger » Tue Jul 10, 2018 9:56 am

If I had good target date funds available in all my accounts I would use them. But since I don't, it's hard to have target date in 4 of 5 accounts and then figure out what to put in the 5th that still keeps the AA I want.

There are also some inefficiencies to keeping target date funds in taxable accounts, but that's probably not worth worrying about if you like the simplicity of the target date fund.

I used target date funds until my husband and I joined finances and had to figure out how to treat our entire portfolio as one, and at that point it became easier to just use three funds balanced accordingly.

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Re: Target date funds....unsophisticated?

Post by Texanbybirth » Tue Jul 10, 2018 10:00 am

Color me unsophisticated. I've never wanted to be sophisticated anyway. :beer

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nedsaid
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Re: Target date funds....unsophisticated?

Post by nedsaid » Tue Jul 10, 2018 10:05 am

Pajamas wrote:
Tue Jul 10, 2018 7:22 am
Ron Scott wrote:
Tue Jul 10, 2018 7:13 am
Target date funds, really? If someone posted they changed their AA every year, paid higher fees for investing than they needed to so someone else could manage their investments, invested in funds that unnecessarily manufactured taxable events every year, and set an AA that didn’t really match their personal risk tolerance, the replies would be merciless and the poster would be sent to the Wiki.

But if you explain you committed all these sins with target funds you get a free pass and a pat on the back. OMG...

This is a good thing?
A target date fund in a Roth account (as in this thread) doesn't unnecessarily (or necessarily) manufacture any taxable events at all.

The changing AA could meet their risk tolerance and needs; they are designed to do so, after all.

Most people (yes most) aren't going to actually carefully and rigorously manage even a simple three fund portfolio. Most people are doing well just to contribute adequate amounts to their retirement accounts in the first place.
There are flaws to Target Date Retirement Funds, I have posted on this before.

Probably not the best for taxable accounts because of the constant rebalancing but these are retirement funds, after all. Maybe these ought to be places in tax deferred retirement accounts?

Vanguard has fiddled with both glidepaths and asset allocation. International Bonds have been added to these portfolios as well. I don't know, I guess we are all such purists that none of us has ever changed our asset allocation or ever added an asset class in our life. Good to know that none of us around here have ever tinkered with our portfolios. It just seems that the folks at Vanguard are human like the rest of us. If you learn more, don't you make changes based upon your knowledge?

Yes, expense ratios might be a tiny bit higher with a Vanguard Target Date Fund than by buying the funds direct yourself. But on the other hand, portfolio decisions are made for you and rebalancing is automatic. The Target Date and Target Risk funds are vastly superior to what most individuals would come up with on their own and vastly cheaper than going to an advisory firm and paying an Assets Under Management Fee to do pretty much the same thing.

So yes there are flaws to these products. Yes, the sponsors of these funds tinker just like you and I do with our own portfolios. Yes, the costs might be a tad bit higher than a self constructed portfolio using the same funds. But we forget how unprepared most individuals are to perform portfolio management. When you buy one of these products, you do get the best thinking of the fund group sponsor for very little money.
A fool and his money are good for business.

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Re: Target date funds....unsophisticated?

Post by deltaneutral83 » Tue Jul 10, 2018 10:12 am

Target funds are great starters when one is learning the ropes, and they are even better for those who would "learn" but subsequently tinker AA and tilt(s) every 6 months.

It doesn't take much more time and effort to develop the three fund strategy and a few more key concepts like taxes, Intl allocation, etc. etc. I personally don't want bonds in my Roth and I am not interested in 40% of my equities being allocated internationally, I'm more of a 20-25% guy. By knowing this and an annual re-balance with consideration for placement of funds for tax efficiency, you can get even more "sophisticated" with very little time and effort. But, for the set it and forget it, target funds are just fine.

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Re: Target date funds....unsophisticated?

Post by GAAP » Tue Jul 10, 2018 10:30 am

Sophistication is overrated...

Sophistication is frequently more expensive.

Sophistication can easily lead to meddling.

Sophistication can trade long term benefits for short term perceived benefits -- which may not be actual benefits.

I don't use them, but they are a good fit for a lot of people -- and it sounds like you and your wife are two of those people.

You should change to something else only if after learning more, you and your wife can clearly articulate a valid reason why it is necessary.

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Re: Target date funds....unsophisticated?

Post by mhadden1 » Tue Jul 10, 2018 10:59 am

My Megatech employer thankfully provided low-cost index funds as 401k options, which improved through the years. :happy Sadly the options did not include inexpensive Target Date funds. :(

My DW is not interested in portfolio management but actuarily speaking is quite likely to outlive me. Also, for me - cognitive decline. For those reasons I intend to eventually move away from my current Boglehead-ish collection of funds, toward an appropriate fund-of-funds solution.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

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Re: Target date funds....unsophisticated?

Post by ANKLEDEEP » Tue Jul 10, 2018 11:59 am

A440 wrote:
Tue Jul 10, 2018 7:53 am
"Life should be exciting. You're investments should be boring"
I like this a lot!!! Sums it up pretty good!!

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Re: Target date funds....unsophisticated?

Post by JoeRetire » Tue Jul 10, 2018 12:07 pm

ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am
Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
Would it matter if someone applied that label to you? If so, why?

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Re: Target date funds....unsophisticated?

Post by nedsaid » Tue Jul 10, 2018 12:13 pm

JoeRetire wrote:
Tue Jul 10, 2018 12:07 pm
ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am
Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
Would it matter if someone applied that label to you? If so, why?
This is a trick that is used to discourage do-it-yourself investors. If you are the target of such a label, keep in mind the idea is to make you feel inadequate and to make you feel like you are missing out on something. It can also be pretty condescending. I am not a three-fund investor and do some things that most Bogleheads don't do. But I defend those who use the simpler approach and acknowledge that it is a perfectly good investment strategy.
A fool and his money are good for business.

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Re: Target date funds....unsophisticated?

Post by JoeRetire » Tue Jul 10, 2018 12:17 pm

nedsaid wrote:
Tue Jul 10, 2018 12:13 pm
JoeRetire wrote:
Tue Jul 10, 2018 12:07 pm
ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am
Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
Would it matter if someone applied that label to you? If so, why?
This is a trick that is used to discourage do-it-yourself investors. If you are the target of such a label, keep in mind the idea is to make you feel inadequate and to make you feel like you are missing out on something. It can also be pretty condescending. I am not a three-fund investor and do some things that most Bogleheads don't do. But I defend those who use the simpler approach and acknowledge that it is a perfectly good investment strategy.
Yup. Labeling goes both ways. Target Date Funds, DIY investors may be labeled "unsophisticated".
Folks who choose to get paid help with their investments sometimes attract their own labels.

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Re: Target date funds....unsophisticated?

Post by jalbert » Tue Jul 10, 2018 4:47 pm

I recently read a post of a member where they called target date funds “unsophisticated”.
“Unsophisticated” is good. It keeps expenses low.
Risk is not a guarantor of return.

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Re: Target date funds....unsophisticated?

Post by Sandtrap » Tue Jul 10, 2018 5:00 pm

ANKLEDEEP wrote:
Tue Jul 10, 2018 12:37 am
Quick post here....

Myself and my wife are currently maxing out our Roth’s with Vanguard 2055 funds....we are also funding employer matiching accounts, taxable, etc....but wanted to focus on the target date funds.

I recently read a post of a member where they called target date funds “unsophisticated”....I kind of like the idea of not haveing to rebalance or fund multiple accounts each month..... I understand that I am paying a slightly higher fee for this, but am I missing the boat?

Am I being a “unsophisticated” investor by choosing to fund Roth’s with target date funds?
Not at all.
j

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Re: Target date funds....unsophisticated?

Post by NotWhoYouThink » Tue Jul 10, 2018 5:15 pm

Sticks and stones and all that. If you have the courage of your convictions a little name-calling won't change your mind. And calling target funds "unsophisticated" is the kind of name calling calculated to sell you on a more expensive managed portfolio. Or sometimes people think what they do is the "right" way, instead of just their individual preference that may or may not be right. They consider your choice to go with a target fund to be a challenge to the superiority of their method, so they lash out.

So are you going to flinch at a little name calling?

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Re: Target date funds....unsophisticated?

Post by indexonlyplease » Tue Jul 10, 2018 5:18 pm

Ron Scott wrote:
Tue Jul 10, 2018 7:13 am
Target date funds, really? If someone posted they changed their AA every year, paid higher fees for investing than they needed to so someone else could manage their investments, invested in funds that unnecessarily manufactured taxable events every year, and set an AA that didn’t really match their personal risk tolerance, the replies would be merciless and the poster would be sent to the Wiki.

But if you explain you committed all these sins with target funds you get a free pass and a pat on the back. OMG...

This is a good thing?
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Re: Target date funds....unsophisticated?

Post by michaeljc70 » Tue Jul 10, 2018 6:42 pm

Ron Scott wrote:
Tue Jul 10, 2018 7:13 am
Target date funds, really? If someone posted they changed their AA every year, paid higher fees for investing than they needed to so someone else could manage their investments, invested in funds that unnecessarily manufactured taxable events every year, and set an AA that didn’t really match their personal risk tolerance, the replies would be merciless and the poster would be sent to the Wiki.

But if you explain you committed all these sins with target funds you get a free pass and a pat on the back. OMG...

This is a good thing?
Why wouldn't it match their risk tolerance? No one gets an affidavit on your retirement year before they sell you a target fund. If you want more risk, you can pick a higher year. No one also keeps you from switching it eventually to another target fund or something completely different. Furthermore, many people buy target funds because they don't know their risk tolerance or what to do with it.

I think target funds, especially in tax free or deferred account are fine (but not perfect).

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Re: Target date funds....unsophisticated?

Post by Cop51 » Tue Jul 10, 2018 7:20 pm

Your target date fund is with Vangauds so you are fine with that 2055. That being said I have reviewed friends and families accounts and some target date funds are not passively invested and hold managed funds in them which leads to them having higher then average fees. Vanguard is not the case. So if you changed jobs or 401k companies take a look at the funds holdings if you select a target date fund in the future because they are not all created the same.

ExitStageLeft
Posts: 899
Joined: Sat Jan 20, 2018 4:02 pm

Re: Target date funds....unsophisticated?

Post by ExitStageLeft » Tue Jul 10, 2018 8:00 pm

I said it. "Target date funds are great for unsophisticated or uninterested investors."

I apologize to anyone whom I have sleighted with this statement. To those who aren't interested in re-balancing a three-fund portfolio, I am happy that you have a target date or lifecycle fund that meets your needs.

Stay the course. :sharebeer

Thegame14
Posts: 267
Joined: Mon May 07, 2018 11:53 am

Re: Target date funds....unsophisticated?

Post by Thegame14 » Tue Jul 10, 2018 8:07 pm

it may not be sophisticated, but if it meets your needs it is great. There are many worse options that you could have choose, especially not investing at all.

Quaestner
Posts: 64
Joined: Tue Jul 18, 2017 6:39 pm

Re: Target date funds....unsophisticated?

Post by Quaestner » Tue Jul 10, 2018 8:16 pm

I might give you different advice if you were doing this in a taxable account, but I think in a Roth, your investment will be appropriate and worry free. (You can always change it later without it being a taxable event.) Cheers!

bikechuck
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Joined: Sun Aug 16, 2015 9:22 pm

Re: Target date funds....unsophisticated?

Post by bikechuck » Tue Jul 10, 2018 9:28 pm

Target dates funds are not bad choices for people that want a set it and forget it choice in tax deferred accounts however there are two things that I do not like about them.

1) Most include international bonds which I prefer not to own
2) I am in the deaccumulation phase of my life and when I need to sell part of my portfolio I prefer not to sell investments that have taken a hit but might regain value.I feel that I have more control over what I sell and when I sell it with a three fund portfolio.

ANKLEDEEP
Posts: 21
Joined: Sun Oct 22, 2017 11:04 pm

Re: Target date funds....unsophisticated?

Post by ANKLEDEEP » Tue Jul 10, 2018 9:29 pm

NotWhoYouThink wrote:
Tue Jul 10, 2018 5:15 pm
Sticks and stones and all that. If you have the courage of your convictions a little name-calling won't change your mind. And calling target funds "unsophisticated" is the kind of name calling calculated to sell you on a more expensive managed portfolio. Or sometimes people think what they do is the "right" way, instead of just their individual preference that may or may not be right. They consider your choice to go with a target fund to be a challenge to the superiority of their method, so they lash out.

So are you going to flinch at a little name calling?
Nope...not at all.

This is why I love this site...it like having a financial advisor, therapist, and mentor all in one!!
Last edited by ANKLEDEEP on Tue Jul 10, 2018 9:37 pm, edited 1 time in total.

ANKLEDEEP
Posts: 21
Joined: Sun Oct 22, 2017 11:04 pm

Re: Target date funds....unsophisticated?

Post by ANKLEDEEP » Tue Jul 10, 2018 9:36 pm

ExitStageLeft wrote:
Tue Jul 10, 2018 8:00 pm
I said it. "Target date funds are great for unsophisticated or uninterested investors."

I apologize to anyone whom I have sleighted with this statement. To those who aren't interested in re-balancing a three-fund portfolio, I am happy that you have a target date or lifecycle fund that meets your needs.

Stay the course. :sharebeer
No worries.... I certainly was not pointing fingers, actually I did not even look at the user name.

Just looking more for reassurance in my choice of fund for my Roth and if I was perhaps missing out by choosing it over a 3 fund option.

Dottie57
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Joined: Thu May 19, 2016 5:43 pm

Re: Target date funds....unsophisticated?

Post by Dottie57 » Tue Jul 10, 2018 10:28 pm

goblue100 wrote:
Tue Jul 10, 2018 8:12 am
Sophisticated is just another word for complex. Insurance firms love to wrap things up in expensive wrappers and market them as sophisticated, while they are just so complex you can't understand how bad they are. I'd say your simple target date fund is just the right amount of complexity.
+1

mcraepat9
Posts: 967
Joined: Thu Jul 16, 2015 11:46 am

Re: Target date funds....unsophisticated?

Post by mcraepat9 » Tue Jul 10, 2018 10:30 pm

Dottie57 wrote:
Tue Jul 10, 2018 10:28 pm
goblue100 wrote:
Tue Jul 10, 2018 8:12 am
Sophisticated is just another word for complex. Insurance firms love to wrap things up in expensive wrappers and market them as sophisticated, while they are just so complex you can't understand how bad they are. I'd say your simple target date fund is just the right amount of complexity.
+1
+1
Amateur investors are not cool-headed logicians.

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