Target-date investments are a great choice for most investors. By using a target-date fund, an investor gets the peace of mind that their investments are taking on the right level of risk. A target date fund not only allows investors to take on a proper level of risk without much investing knowledge, they also allow a 'set and forget' methodology, so they don't need to re-balance their portfolio each year.
For far too long, retirement planning and investing has suffered from narrow, one-size-fits-all solutions. Target-date investments offer a very enticing alternative approach. Rather than, say, a worker hoping to retire in 15 years and another hoping to retire in 35 years investing in the same types of portfolios, investors can put together an appropriate mix of stocks, bonds, and cash equivalents based on when the money is expected to be withdrawn.
Target-date investments are a good idea, because they have people who manage them who are smart about the market and what they are doing. It is a good way to find a fun, particularly if you need to make sure that the investments get more and more conservative as your child gets closer to college age.
Target-date investments are mixtures of stocks and bonds which become progressively conservative as investors move closer to retirement. Especially for young and inexperienced investors, target-date investments make perfect sense; basically, target-date investments update and evolve over time without the investor having to make a lot of decisions about their funds.However, in order to take full-advantage of the benefits of target-date investments, investors should research various options and make sure that their specific target-date investments have low fees for operating costs and have an allocation of assets that works well with the anticipated retirement date.