Date: Wed, 15 Feb 2006 10:45:36 -0600
From: Bread 
Newsgroups: misc.invest.financial-plan
Subject: Re: 401K Rollover - Where to Roll it Over?
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	HYiAYXnnVdW7GiXEjUwUDlBVThzOM7nGRqq5byuKrrGN/dcAk4oQPQ==
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On 2006-02-15 08:05:36 -0500, "MichaelC"  said:

> 
> "Elizabeth Richardson"  wrote in message
> news:9ktIf.25336$id5.22595@bgtnsc04-news.ops.worldnet.att.net...
>> 
>> "MichaelC"  wrote in message
>> news:HNbIf.5678$rL5.4327@newssvr27.news.prodigy.net...
>>> 
>>> 
>>> The LifeStrategy funds bug me because they leave some money on the table
>> for
>>> the risk taken
>> 
>> I don't understand what you mean by leaving money on the table. Vanguard's
>> LifeStrategy Funds have very low expenses (0.3% I believe) and are fully
>> invested.
> 
> These funds (not just Vanguard, but also Fidelity's) don't seem to bring
> back the returns they should, leaving a couple of points "on the table".

Um, "the returns they should"?

They are built out of indices and have asset allocations targeting certain
levels of risk.  The "shoulds" here are (a) they should match what the
set of underlying indices get, with minimal drag from fees; (b) they
should be chosen with an asset allocation which matches the investors
needs.

> Perhaps this is just a statistical anomaly (they are all relatively new) but
> I would expect a fund billing itself as targeting a 2045 retirement, for
> example, to at least be matching or exceeding  a basket of funds that the
> average person can put together on their own.

Have you seen what the average person puts together on his own?  The
average person (a) pays way more in fees, especially in actively managed
funds; (b) doesn't always choose an appropriate asset allocation; (c) rarely
does the right thing for rebalancing to maintain that asset allocation.

These things make it much easier for an investor to set it and forget it.

Most "average persons" are not inclined to put anything together on their
own, and even if they were, don't necessarily have the time or inclination
for research necessary to come up with something better than a well chosen
lifestyle fund.  These funds aren't for everyone, but they do seem appropriate
for a lot of folks.

That said, there were a couple of excellent other funds listed that
the OP ought to consider as well.  But if he or she wants to just put
money into one fund and never have to think much about it, a well chosen
asset allocation built out of low-cost indices is not a bad idea at all.

-- 
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