Comments on: 3 Reasons Why I Love Index Funds

By: MoneyNing

MoneyNing — Mon, 06 Aug 2007 01:15:29 +0000

I like low cost index funds but not so much retirement target index funds since you are essentially paying for their services again which you can just do yourself.

By: plonkee

plonkee — Fri, 03 Aug 2007 11:52:48 +0000

‘I voted for him twice’

They say to choose the lessor of two evils, not the greater

He certainly isn’t admired but thats not the real reason that you need international diversification, of course. The USA may have the largest economy, but its still smaller than everyone else put together.

By: jpsfranks

jpsfranks — Fri, 03 Aug 2007 04:37:56 +0000

You think Kerry would’ve been better?

Unfortunately it’s getting hard to imagine someone doing worse.

By: jim

jim — Fri, 03 Aug 2007 04:16:31 +0000

Well, I meant exposure to international and didn’t realize that EAFE was a specific asset class so good point.

You think Kerry would’ve been better?

By: jpsfranks

jpsfranks — Fri, 03 Aug 2007 04:06:58 +0000

I’m also in some emerging markets to give me some exposure to EAFE (Europe, Australasia, and Far East

There are no emerging markets in EAFE, it’s explicitly a developed markets index.

I voted for him twice, thank you very much

No comment.

By: jim

jim — Thu, 02 Aug 2007 15:55:22 +0000

You don’t trust ANYTHING.

By: mbhunter

mbhunter — Thu, 02 Aug 2007 15:29:43 +0000

By target retirement fund I assume you mean a mix of mutual funds for which the portions of aggressive investments and conservative investments changes periodically as one nears retirement.

If this wasn’t what you were talking about, I’ll comment on them anyway.

My workplace offers target retirement funds, and I agree that they do “make sense” on some level; you don’t “want” to be in bonds early in your career and you don’t “want” to be in stocks when you retire. However, these funds cross the line from diversification within a sector into overall asset allocation, and that asset allocation change throughout the life of the fund is automatic and largely oblivious to prevailing market conditions. If I see stocks as getting hammered sooner rather than later, I want the ability to move out of stocks myself, regardless of where I am in the timeline of the fund.

Target retirement funds transfer too much investor discretion to a computer program, and I’m not investing in those. I do have some mutual funds, though.