Thinkadvisor.com recently had an article that highlights the flaws of target date funds, it's worth a reading if you have or plan to invest in target date funds.
Highlights of the article include:
Highlights of the article include:
- Target date funds have the same asset allocation for all investors regardless of their individual circumstances.
- A new research paper shows that the allocation to equities in most target date funds is too low from many retirees.
- Target date funds and similar funds could be improved by taking a number of external factors into account in their asset allocation.
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