Comments on: Congress Is Investigating Target Date Funds – Should You?

By: Phinance

Phinance — Tue, 05 May 2009 22:00:58 +0000

Although it’s important for the government to investigate products that are purposefully harmful to investors, it’s also true that no one cares about your money more than you. A finance manager is fine taking in 3% from several clients, so you’ll never see the same care put towards your portfolio as you can do for yourself.

If it’s in your 401k, you would know about it if you reallocate your assets every 6 months as recommended. 401k’s themselves are questionable at this point.

By: Eves Bank

Eves Bank — Tue, 05 May 2009 16:31:19 +0000

whatever decisions people make when it comes to putting their money into anything – they should at least understand and research where that money is going into. I agree with James – this is something people can do themselves.

By: Jen

Jen — Tue, 05 May 2009 13:43:57 +0000

Thanks for the post! I knew there was variance between fund companies on asset allocations, but I didn’t realize that the differences could be this huge! I have the Vanguard 2035 fund, but I read the prospectus and I’m comfortable with the asset allocation. Once again, the consumer needs to do his or her own research.

Reading the prospectus is like reading the nutrition labels on food. The marketing may say it’s healthy, but if the cereal is chock full of high fructose corn syrup, it really isn’t healthy and shame on the buyer for beliving the hype.

By: Wealth Pilgrim

Wealth Pilgrim — Mon, 04 May 2009 22:37:45 +0000

Thanks James and OI. I agree with you both. If nothing else, I think most people GET IT. We have to take responsibility and get involved.

By: James Fowlkes

James Fowlkes — Mon, 04 May 2009 17:35:51 +0000

Excellent post. It is absolutely ridiculous to count on these funds to do the work you could do in 10-15 minutes per month. It shows a level of apathy that is truly sad. Just tweeted this post out to my followers as well.

By: ObliviousInvestor

ObliviousInvestor — Mon, 04 May 2009 17:05:22 +0000

Excellent job bringing up something that doesn’t get enough attention.

Personally, I’m a big fan of (low-cost, indexed) target retirement funds. But it’s absolutely essential for investors to read the prospectus, take a look at the asset allocation–both now, and what it is supposed to be in the future–and make sure it lines up appropriately with their own goals and personal needs.

Unfortunately, the truth of the matter is that most investors aren’t going to take the time to read a prospectus. I think many of the oversight/regulation suggestions that John Bogle has been championing lately make a lot of sense.

By: Wealth Pilgrim

Wealth Pilgrim — Mon, 04 May 2009 16:34:31 +0000

Matthew,

Well said. This is another reason why I don’t like these types of funds. You are right on the money.

By: Matthew

Matthew — Mon, 04 May 2009 15:06:01 +0000

Problem is, even if you are retiring in 2010 you still need to have a decent amount in equities to beat inflation. So, the bottom line is you need to review the funds composition and decide if the risk is worth it. If you are 90% in bonds when you retire that could be too much…