do I need to watch target retirement date funds?

[Goldy1]

They compose our roths and 401K. I thought the whole point was to put them on autopilot. However, should I monitor thier performace and sell accordingly?

[GREENBACK]

They compose our roths and 401K. I thought the whole point was to put them on autopilot. However, should I monitor thier performace and sell accordingly?

The purpose of these is so you don't have to monitor them i.e. they are easy for those who don't want to manage a retirement portfolio. One problem with them is all your funds are with one mutual fund company and odds are great that one company doesn't own the best funds across the broad spectrum of investments.

If you went with say....Vanguard, you would be well diversified with their target retirement plan but everything you owned would be Vanguard funds. You might get decent returns but Vanguard doesn't have a lock on the best funds in every category. If you did your homework and spread it out to the best funds available regardless of the company you would likely have a much better result in the long run. With all that said I have a target retirement for my roth with Vanguard because of time constraints and maybe a little laziness I think you can monitor them but can't change much from what I've seen.

[blankcheck]

By "sell accordingly," do you mean changing to a different fund within your retirement vehicle? Well, technically yes, you can do that like any other mutual fund. But if you mean change the allocation of the sections which make up the target fund itself, then no you can't.

Example: Vanguard's Target 2050 fund is composed of this:

Vanguard Total Stock Market Index Fund Investor Shares 72.2%
Vanguard Total Bond Market II Index Fund Investor Shares 9.9%
Vanguard European Stock Index Fund Investor Shares 9.7%
Vanguard Pacific Stock Index Fund Investor Shares 4.9%
Vanguard Emerging Markets Stock Index Fund Investor Shares 3.3%

The percentages will change according to a predetermined timeline; you have no control over that. If you wanted to have a higher percentage of, say, Emerging Markets, then you'd have to purchase shares of that fund outside of the target fund. But that would defeat the purpose of the target fund; you are now managing your own allocation directly.

Personally, I'm resisting temptation and staying the course.

[Broken Arrow]

However, should I monitor thier performace and sell accordingly?

No. Target Retirement rebalances for you automatically. The whole point of these types of funds is that you don't have to worry about such adjustments in the first place. You can just buy it... and pretty much forget it.

(Ooops, just realized that the question has already been answered. )

[Goldy1]

ok great. that's what I thought. Even tho I have schooled myself on the basics of investments, I don't feel confident when implementing the strategy of picking the funds even tho I have done it before ie. pick a fund with mid cap and allocate so much of a percentage.
I do like how it will become more conservative on its own as years go by.

[GREENBACK]

My employer began offering TR funds last year for my 457 plan but I still do that one on my own because their are some good funds in the plan and I prefer an active role in this case. Also I have a lot more money invested here. I suppose I should take this approach with the roth but haven't.