Far too much truth to this, which is from The Reformed Broker
Fund Brochure Says...
What It Really Means...
Leveraged to the Hilt
We'll Chase Stocks For You in Whichever Country is Most Overheated Right Now
A Basket of Government-Subsidized Experiments and Some Shares of GE
We Will Invest in Sewing Machine and Typewriter Companies
We Will Pay Up for High-Multiple Stocks/ You Will Pay Up in Fees
No Such Thing - All Corporations are Evil, Sucker
We Will Basically Buy the Index and Go Golfing
Uses Exotic Derivatives You've Never Heard Of
We Will Underperform Both the Bond AND the Stock Market. You're Welcome.
Collection of Chinese Online Gaming Stocks and New Jersey Biotech Startups
We Can See 20 Years Into the Future, Only Putnam Knows When and How You Will Die
Gutless Fund Manager
Manager Will Take Credit for Up Years, Blame Computers for Down Years
We Will Throw Darts
No Need to Spread it Out, Send Us Everything You Have
The current fad is funds with a year in them, like these from TRowePrice: http://individual.troweprice.com/public/Retail/Mutual-Funds/Retirement-Funds There are similar types of funds at Vanguard, Fidelity, and probably every other large firm.
These are NOT a bad idea. In fact, I have some myself. They automatically switch to more conservative assets as you grow older, and purchased through an outfit like Vanguard have low expenses. There’s usually no actual fund, just percentages of other funds managed by the fund family. At some firms, there’s no incremental cost – just the expenses of the underlying funds, which are usually low.
The interesting thing, though, is that there’s no real agreement as to how much you should have in stocks versus bonds (and then classes within them). While all get more conservative with age, that’s all they have in common. This is realistic given the state of the art and the inherent riskiness of investing for decades, but it means that the “years” in the name of the fund really don’t mean much except relative to each other. Vanguard’s, TRowePrice’s and Fidelity’s 2015 funds looked substantially different from each other, when last I looked.