I skimmed through the responses, but I wanted to address a couple of things (yes, I know you've made a decision, but still).
1) Are you sure your friend (and yourself) will be able to live with the daily market fluctuations of a 100% stocks portfolio? It's not often easy for people who are not used to it.
2) For someone who is 50... maybe 100% stocks is a little much... but you can always add bonds later on I suppose. I wouldn't recommend a 3-funds portfolio because that requires maintenance to keep the AA where it should be. That means looking at the portfolio often enough, and having to make decisions. A target date fund is easy and hands-off.
3) I know you didn't choose a target date fund but to address a question you asked between AAGTX (American Fund Target 2040) and FBITX (Fidelity Freedom 2040). They both have fairly similar allocation, except the American Fund one has less non-US stocks. Beyond the difference in ER, which can get significant when there's enough money in the fund, the American Fund one has a 5.75% front-load. That's a huge no-no.
1) Are you sure your friend (and yourself) will be able to live with the daily market fluctuations of a 100% stocks portfolio? It's not often easy for people who are not used to it.
2) For someone who is 50... maybe 100% stocks is a little much... but you can always add bonds later on I suppose. I wouldn't recommend a 3-funds portfolio because that requires maintenance to keep the AA where it should be. That means looking at the portfolio often enough, and having to make decisions. A target date fund is easy and hands-off.
3) I know you didn't choose a target date fund but to address a question you asked between AAGTX (American Fund Target 2040) and FBITX (Fidelity Freedom 2040). They both have fairly similar allocation, except the American Fund one has less non-US stocks. Beyond the difference in ER, which can get significant when there's enough money in the fund, the American Fund one has a 5.75% front-load. That's a huge no-no.
Statistics: Posted by pasadena — Thu Jul 18, 2024 7:07 am