Bogle on Target-Date Funds

I have written about the questions surrounding target-date funds. But nothing compares to a few comments made by John Bogle in a Morningstar video interview. Mr. Bogle also discusses the supposed death of buy and hold investing in the first segment of the interview.

Mr. Bogle, the father of Vanguard, calls out the gimmicks existing in the fund industry. He makes a classic comment regarding a particular aspect of the design of target-date funds: “...that has nothing to do with stewardship and everything to do with salesmanship.”

His final recommendation is to build your own target-date fund. The suggestion has merit for many investors, but not for all investors. There are pros and cons of target-date funds, and you should weigh the options prior to building your portfolio.