The Good, Bad And Ugly Of Target-Date Funds
SEIA Senior Financial Advisor Chad Bates was quoted in Financial Advisor Magazine:
“I’ve never made a direct recommendation to one of my clients to invest in a target-date fund, but they do serve a very specific purpose and fill a very important gap,” said Chad Bates of Signature Estate and Investment Advisors in Los Angeles.
Target-date funds, which hold trillions of dollars and represent some 64% of all 401(k) money, as measured by Vanguard, do “a fantastic job” of rebalancing portfolios, Bates acknowledged, especially for “novice investors.” These are people who may not have a financial professional to assist them with “crafting an investment strategy customized to their individual needs, risk tolerance, and time line,” he said. The funds allow these savers to set their strategy once and forget about it, he said.
On the other hand, he added, many people would be better off working with an advisor. Advisors empower investors to adapt to changing needs and goals, not to mention shifting market conditions. “Good financial advisors help their clients identify and plan for both short- and long-term goals [and] take advantage of different account types and investment vehicles,” he said.
Read the full article here: https://www.fa-mag.com/news/the-good–the-bad–and-the-ugly-of-target-date-funds-79507.html?section=43
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