Vanguard's "Target Retirement 2xx5" funds

[LondonBroil]

I'd like to hear what everyone here thinks about these. Being 27 years old, the 2045 is the one I'd go with. Its holdings are around 89% in stocks and 10% in bonds. I wouldn't mind a little higher % of stocks but these seem like a "buy-it-and-forget-it" fund for people who don't really follow this stuff (like me).

[AceHigh]

There a great place to invest if you don't want to make any money. You'll probably make a little more than treasury's or CD's.

If you want to make real money you are going to have to do your own investing.

[RunDownHouse]

Do you honestly think that they can outperform the market by enough to cover management fees over 40 years? If so, then go ahead and get it, but I think you'd be wrong.

[GeorgeF]

I see nothing wrong with it. It is diversified (tilted toward the USA), expenses are low, you will not be wasting your valuable time (I mean that) studying it. With the time you save by keeping your investing simple you can devote yourself to earning more money.

[dlk9s]

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Do you honestly think that they can outperform the market by enough to cover management fees over 40 years? If so, then go ahead and get it, but I think you'd be wrong.

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Vanguard's fees are ridiculously low. I don't have the breakdown of funds in the above mentioned portfolio on me, but it was pretty much different index funds. The biggie is the Total Stock Market Index, which I own, and its fees are microscopic.

Even some of Vanguard's actively managed funds have low expenses.

The idea with something like this is to "get rich slowly" while having a professional do things for you and allow you to sit back with at least some peace of mind that your money is safe (at least no less safe than if you did things yourself).

[RunDownHouse]

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Vanguard's fees are ridiculously low. I don't have the breakdown of funds in the above mentioned portfolio on me, but it was pretty much different index funds. The biggie is the Total Stock Market Index, which I own, and its fees are microscopic.

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Right, I agree. If its essentially an index fund, why don't you just buy an index fund? Do you have material reason to believe that that particular found can outperform the market?

Its one of those "Why?" questions, not "Why not?" if you get my drift.

[Benjamin]

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If its essentially an index fund, why don't you just buy an index fund? Do you have material reason to believe that that particular found can outperform the market?


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The point of these funds is that you get broad diversification (more than you can get from a single index fund) combined with a gradual lessening of risk as you approach retirement age with no intervention required by you, and for a very low cost. They handle rebalancing and adjusting the amount of stock exposure down as you get older.

Pretty nice offerings if you ask me. I'd like to see a little more international, and a little of their REIT index in there, but still a nice 1 stop fund for those who don't want to spend the time putting a custom portfolio together.

B.

[LondonBroil]

I decided against this fund and put my 2004 contribution (my first year, I just signed up) into the Vanguard Small Cap Value Index Fund. I'm trying to decide what to put my 2005 contribution into to start giving me a little diversity. I'm leaning towards either:

- International Value Fund (VTRIX) (The fund charges a 2% fee ($20 per $1,000 invested) on shares redeemed within two months of purchase.) Does this mean they only charge me if I sell shares within 2 months after buying it?

- S&P 500 Index (VFINX)



Also, both the Small Value Cap Index and VFINX (along with others) charge either a $2.50/quarter or $10/year fee for accounts under $10K. By account, do they mean the total amount I have in al my funds combined or each individual fund?

For example, I have $4000 each in 3 different funds. Do I get charged a $10 annual fee on each of those funds or is my "account" balance $12K relieving me of any fees?