Do you use targeted retirement funds in IRA?
Example of a targeted retirement fund vs SP500 Targeted retirement 2045: +23% past 5 years SP500: +80% past 5 years They both dropped by 30% in 2020. What’s the point of those targeted retirement bs?
Nope. No target date funds in my retirement profile.
Any specific ETF for S and P 500 ?
VOO
If you use them you should ONLY use them in an IRA. S&P 500 also dropped almost 32% during 2020. You have to compare over the same time period. Target retirement funds will have less volatility as you get closer to retirement.
To put it another way, target retirement funds are definitionally going to have less gain when stocks do well because you are taking less risk… But if stocks tank, they won’t tank as much
Yes I compared both to 5y and 20y period and targeted retirement funds seem to be garbage.
I've invested in them before but I'm thinking I will not buy them anymore. They don't beat the market.
Why not? Vanguard fees are super small
Fees are small but how about performance? Why not just buy SP?
More diversification?
No.
They are usually high fee, so the broker is presumably incentivized to make them the defaults for you. Just switch out to an S&P500 ETF.
Not vanguard ones