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As an investing rookie I did a little research on these and they sound decent with low fees. If I stick my Roth ira into their target fund, is that smart? I don't want to really think about it or buy/sell stocks daily. Just want a decent long term return. If I put my entire Roth into it am I making a mistake?
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Not a mistake at all. For someone who wants the ultimate in simplicity, low costs and automatic rebalancing, I think a target fund is a great way to go. You get instant diversification across a broad range of investments. Costs are low. And the fund automatically gets more conservative as you get closer to retirement age. Target funds aren't perfect, but neither is anything else.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going. -
And not only just across a broad range of investments, target date funds go a step further and automatically diversify over a range of asset classes too.
Some mutual funds only invest in stocks. But are very diversified in the types of stock investments.
Target date funds will have domestic and foreign stocks, bonds, inflation protected bonds and cash equivalent investments over the course of time. Buying 1 target date fund is like buying 5 other funds.
You can read up more about Vanguard's options here: https://personal.vanguard.com/us/fun...RetirementList
And they have a little graph that shows you how you'll be diversified over time. Just choose your age, and at the bottom of the page, you can see how the investments will change over time.Comment
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