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Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81572  
Subject: Re: Lifecycle Funds Retirement Accounts Date: 1/18/2008 12:04 PM
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While the comments by Vickifool and Hawkin are correct, I would change today into as far out of a Vanguard Target Market Fund as I could tolerate.

1. There's never too bad a time to get into a better asset allocation IMO, and Target Market Fund is better than just a S&P 500 fund.

2. While the S&P 500 fund does have a lower cost it is less volitle these last 8 years (lower ups and downs) because it doesn't have exposure to mid- and small-caps. These will be hit hard now, BUT long term they are a better asset allocation. Hence Vicki's advice is good to go with a Total Stock Market Index IMO.

3. The S&P 500 does have exposure to foreign investments because these large cap US companies do. But in our global world you need more exposure to the companies that Vanguard includes.

Could you fare worse by doing this. Yes, I think the S&P will bounce back first, but I also think the broader diversification is more important. I'd bet on the broader diversification, especially long-term, but no one can predict the short-term.

Could you pick a better allocation by doing it yourself within Vanguard? Again, probably yes, but this is a very good start AND you shouldn't move forward with individual funds until you more fully buy into your own "model" allocation.

No bad decisions with any of these choices. This is what I'd do and have done.

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