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Investing Specialists

More Portfolio Lessons From Target-Date Funds

These all-in-one funds offer not only simplicity, but also valuable insights for DIY investors.

Back in 2019, my colleague Josh Charlson wrote about lessons from target-date funds, focusing on bigger-picture investment issues. Probably the biggest lesson of all is that there’s no need to overcomplicate things with your portfolio. Target-date funds can be excellent “one and done” solutions because they offer expert management, broadly diversified portfolios, and asset mixes geared toward a specific target date that automatically adjust over time. But target-date funds also offer valuable insights for investors who prefer to build their own portfolios. Here are some of the key lessons to draw from target-date funds’ sub-asset allocations, which represent the mix of assets these funds target at different points during their life cycles.

You Probably Need More Equity Exposure Than You Think
Josh also covered this one in his column, but it’s important enough that it bears repeating: Keeping a healthy dose of your assets in stocks is critical both early in your retirement savings years and later on.