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Well target date funds can cushion the impact of market drops while still giving you most of the benefits of a rising market. I use vfifx but pick a year that
by wombat-man 5y ago
Well target date funds can cushion the impact of market drops while still giving you most of the benefits of a rising market. I use vfifx but pick a year that coincides with when you may want to exit.
I also have a larger buffer of cash these days, and have a scheduled purchase of the target date funds weekly.
There's no magic safety net. You could try to bet against the market through the options market, but timing is everything.
- prirun 5y agoBe careful using target date funds in a non-retirement account subject to taxes: https://www.mymoneyblog.com/vanguard-target-retirement-funds-nav-drop-cap-gains-distribution.html https://www.mymoneyblog.com/vanguard-target-retirement-funds...
- wombat-man 5y agoInteresting. Kinda seems like a one time event but not ideal. Thanks for pointing this out, I'm going to have to do some thinking about this.
- prirun 5y agoI moved some bonds to Wellington Fund early in 2021 and got hit with it in December. I wasn't expecting a big capital gain w/o selling and am also re-thinking whether I want to be in this for 2022.