Shorter WSJ: Beware Target Date Funds

Missing the Target
Graphic
Source: WSJ

 

You may have missed the WSJ’s takedown on Target-date funds this weekend. Its a must.

The idea of target date funds are a form of auto-pilot that automatically shifts allocations into more bonds less stocks as the investor ages. Target date funds now manage about $550 billion dollars.

The problem with these funds — aside from high fees and higher-costs — is how out of phase its been with the markets for retiring babyboomers. Many of them have found they are selling equities into weakness and buying bonds into a 30 year bull market which is looking kinda old and shaky.

Anyone with a 401k or who uses these funds should definitely give the article a read.

 

 
Source:
Missing the Target
LIAM PLEVEN and JOE LIGHT
WSJ, June 14, 2013
http://online.wsj.com/article/SB10001424127887324049504578541831083543670.html

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