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
Also FZROX.
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.
But then he has to balance it once in a while isn't
Buy differently over time
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.
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
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?
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.
Look at the expense ratios - target date funds are higher since they auto-rebalance over time
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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.