UberThe 𝖣

VTSAX or vanguard target retirement fund

I put my money into VFFVX - a 2055 Target date retirement fund. Noticed a lot of people saying they just do VTSAX - am I missing out on returns being in VFFVX? Do you not put anything in bonds/safer investments and why? I'm 28 btw, TC 250K

Add a comment
Yelp sJJv80 Apr 25, 2019

If you have a long time horizon, an all stock portfolio has the best return at the cost of higher volatility. If you want something that delivers a good return with much less volatility, then the all weather portfolio or the golden butterfly are good.

Qualcomm 1001010 Apr 25, 2019

Also FZROX.

Broadcom Ltd. siSN2ao Apr 25, 2019

You can just mix total bond ETF and total stock ETF to do the exact same thing as target date, except for a fat fee Vanguard takes from a target date fund.

Oracle aham Apr 25, 2019

But then he has to balance it once in a while isn't

New
hoopsguy Apr 25, 2019

Buy differently over time

Finale Inventory huHG50 Apr 25, 2019

For my 401k, I just put it all in VFFVX. Then I have a Roth IRA and personal investment account on WealthFront that I put the rest of my money in. I keep a small amount of money on Robinhood for when I want to invest in specific companies.

Amazon menthos Apr 25, 2019

Wealthfront sucks

PayPal nanshwi Apr 26, 2019

Why?

Google Woopsy Apr 26, 2019

VFFVX is just a mix of 4 other funds (you already have 54% in VTSAX!). You can instead buy these funds and have the exact same exposure. The reason people use thing like VFFVX is that they will change the percentage of allocation between the fund to have more bond and less stock as you gets closer to retirement (reduce your risk at the time you will need the money) Reading stuff on boggleheads can really help to understand the philosophy at hand

Uber The 𝖣 OP Apr 26, 2019

Thanks for the detailed response - I do understand that it's just a mix of these other funds. However, I guess the question is, if I have high risk tolerance should I not bother with the international and bond components?

Google Woopsy Apr 26, 2019

If you have a high risk tolerance you can have zero bonds I think. The total vs international are both stocks, the question is how much exposure you want to the US vs rest of the world.

Google ♣️♠️♥️♦️ Apr 26, 2019

Look at the expense ratios - target date funds are higher since they auto-rebalance over time

Flagged by the community.