Vanguard Target Retirement 2065

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MnD
Posts: 2979
Joined: Mon Jan 14, 2008 12:41 pm

Vanguard Target Retirement 2065

Post by MnD » Sat Aug 12, 2017 10:25 pm

https://www.wsj.com/articles/retiring-i ... 1502539200
Vanguard Group is urging investors to think ahead when it comes to retirement planning. Way ahead.
The Malvern, Pa., asset manager last month launched Vanguard Target Retirement 2065, a target-date fund geared to investors 18 to 22 years old who would be in line to retire about 50 years from now.


1 Vanguard Total Stock Market Index Fund Investor Shares 54.0%
2 Vanguard Total International Stock Index Fund Investor Shares 36.0%
3 Vanguard Total Bond Market II Index Fund Investor Shares* 7.0%
4 Vanguard Total International Bond Index Fund Investor Shares 3.0%


drk
Posts: 24
Joined: Mon Jul 24, 2017 10:33 pm

Re: Vanguard Target Retirement 2065

Post by drk » Sun Aug 13, 2017 1:17 am

The advisors quoted in that article effectively demonstrate why normal investors cannot win with active management: if someone is any good, you can't hire them.

Engineer250
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Re: Vanguard Target Retirement 2065

Post by Engineer250 » Sun Aug 13, 2017 2:26 am

2065 has already popped into my Vanguard 401k!

The thing I find interesting is 2065, 2060, 2055, 2050, and 2045 are all pretty near identical in current AA. I think VG advocates 10% bonds up until a certain point and all those funds are still at the same point in their glide path.
Where the tides of fortune take us, no man can know.

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willthrill81
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Location: USA

Re: Vanguard Target Retirement 2065

Post by willthrill81 » Sun Aug 13, 2017 5:34 pm

Engineer250 wrote:
Sun Aug 13, 2017 2:26 am
2065 has already popped into my Vanguard 401k!

The thing I find interesting is 2065, 2060, 2055, 2050, and 2045 are all pretty near identical in current AA. I think VG advocates 10% bonds up until a certain point and all those funds are still at the same point in their glide path.
Some believe that Vanguard and other providers of target date funds allocate roughly 10% toward bonds as little more than to distinguish them from a global stock fund, which is pretty much what they would be otherwise. It certainly isn't to improve the expected returns. Paul Merriman has questioned why an investor with a goal several decades into the future truly needs bonds at all, especially since the 10% allocation to bonds is expected to reduce long-term returns by .4-.5%, and I agree. The volatility of 90/10 isn't likely to be behaviorally distinguishable from 100/0.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Helo80
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Re: Vanguard Target Retirement 2065

Post by Helo80 » Sun Aug 13, 2017 5:40 pm

I got in a week or two after it went live for the minimum investment merely to see what would happen to it after 40 years. I put in $1,000 and we'll see what happens in 40 years. I just wish I had bought on day 1 merely to say that I was there from the beginning of this vanguard fund.

Engineer250
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Joined: Wed Jun 22, 2016 1:41 pm

Re: Vanguard Target Retirement 2065

Post by Engineer250 » Sun Aug 13, 2017 7:07 pm

willthrill81 wrote:
Sun Aug 13, 2017 5:34 pm
Engineer250 wrote:
Sun Aug 13, 2017 2:26 am
2065 has already popped into my Vanguard 401k!

The thing I find interesting is 2065, 2060, 2055, 2050, and 2045 are all pretty near identical in current AA. I think VG advocates 10% bonds up until a certain point and all those funds are still at the same point in their glide path.
Some believe that Vanguard and other providers of target date funds allocate roughly 10% toward bonds as little more than to distinguish them from a global stock fund, which is pretty much what they would be otherwise. It certainly isn't to improve the expected returns. Paul Merriman has questioned why an investor with a goal several decades into the future truly needs bonds at all, especially since the 10% allocation to bonds is expected to reduce long-term returns by .4-.5%, and I agree. The volatility of 90/10 isn't likely to be behaviorally distinguishable from 100/0.
Makes sense to me. Since there's another thread about the TSP having "poor choices" because it doesn't offer some small value or small growth or whatever this year's financial "clever tip" is, I understand why VG would want to make their target funds seem more complicated than they really are. If that keeps people choosing low cost broad based indices over high cost niche funds I think it's a good strategy. I agree the difference between 100/0 and 90/10 is pretty negligible on a portfolio.
Where the tides of fortune take us, no man can know.

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