I am 39, Starting retirement planning and Overwhelmed. :(

Saving & investing, frugality & simple living. They're all part of the wealth equation.
Here's the place to discuss getting (and keeping!) your money.

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Postby Dylan » Sun May 06, 2007 7:03 am

I'm not going to recommend a selection for you, but I will share three truths with you:

1. Past returns are completely irrelevant. Any "gut" link between past performance and future performance is pure illusion.

2. It is possible for you to pick an actively managed fund that will out perform the indices over the next 20+ years, but the statistical odds of doing so are worse than catching a fly ball at a major league ball park. Have you ever gone to see a baseball game PLANNING on catching a fly ball?

3. The only part of your investment return you have ANY control over is your fees and expenses.

One last thought about target/lifecycle funds. These types of funds don't take into account how much money you have (whether you are on track, ahead, or behind). Just because two people might have the same number of years until retirement, one might have significantly more saved already. I don't think it is necessarily appropriate for them to be invested the exact same way, just because they plan to retire at the same time. The person starting later may need to be more aggressive for a longer amount of time.

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