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re: Just opened my first Roth IRA, now what?
Posted on 10/24/19 at 11:52 am to WG_Dawg
Posted on 10/24/19 at 11:52 am to WG_Dawg
quote:
it's a target date fund through Vanguard. Waht is the knock on those and why is that not suggested?
1) You can't get a target date fund that is 100% stocks. I think the most aggressive split is 90/10.
2) The bond percentage of target date funds increases as you get older without your control (which is exactly why many like it).
But I think the prevailing view of many people who know a little bit about that market is that you're ok with a 90-100% stock allocation into your 40s.
Short answer: They are not aggressive enough so you're missing out on early gains.
This post was edited on 10/24/19 at 11:53 am
2
Posted on 10/24/19 at 1:17 pm to bayoubengals88
quote:
1) You can't get a target date fund that is 100% stocks. I think the most aggressive split is 90/10.
2) The bond percentage of target date funds increases as you get older without your control (which is exactly why many like it).
But I think the prevailing view of many people who know a little bit about that market is that you're ok with a 90-100% stock allocation into your 40s.
Short answer: They are not aggressive enough so you're missing out on early gains.
this is very helpful, thank you. I'm sure I can root around a little or ask Vanguard for help, but what exactly would be my best move in this scenario? Can I simply go into the fund on vangaurd's website and just, I guess for lack of a better word, change what kind of fund it is? Like change it from target date 20XX to something else? Or is it a complete overhaul where I have to sell out or shut down the existing fund then reinvest in a new one?
Posted on 10/25/19 at 10:20 am to bayoubengals88
quote:
Short answer: They are not aggressive enough so you're missing out on early gains.
Their fees are also higher.
Aggression and "early gains" are not necessarily correlated
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