TDF
Templeton Dragon Fund
stock NYSE Closed Ended Fund

It’s a TDF, I’m gonna switch to manually choosing investments

>I know most would opt out from investing into a TDF, but if I were to get out, only best investment is Fidelity S&P 500 (FXAIX) with expense ratio of 0.015%. Maybe add FSMDX (mid-cap; 0.025%) and TSCSX (small-cap; 0.78%)? FSPSX (International; 0.035%)?
why would you get out of the TDF and then re-assemble a TDF?

I currently have a Vanguard TDF 2065 that I have been investing into the last 8.5 years and have amounted up to $324k. And Roth IRA (Which I started to invest into) has $55k into FSKAX and FTIHX (70/30 respectively).
I know most would opt out from investing into a TDF, but if I were to get out, only best investment is Fidelity S&P 500 (FXAIX) with expense ratio of 0.015%. Maybe add FSMDX (mid-cap; 0.025%) and TSCSX (small-cap; 0.78%)? FSPSX (International; 0.035%)? Otherwise, don’t know if I can really put together a well-diversified portfolio with what my company offers.
Any thoughts or suggestions are welcomed. Can provide even more context if needed.

Ahhh got it, the ER is 0.19% for the TDF so not too bad not too good? The ER for my Roth IRA investment is 0.02 which I'm assuming is very good compared to the ER for the TDF. I'm not sure what I would invest in instead of the TDF, the only other options besides TDF are international, small med and large cap stocks, balanced, diversified real return, and bonds, all of which I have little/no knowledge about

Ok. So they are preset differently than a traditional TDF.

They probably have more than just TDF where are the full plan docs?

Part of riding out the rollercoaster is setting yourself on a specific plan and sticking to it. So if you don’t use a TDF, maybe you rebalance once or twice a year, or quarterly, rather than trying to time the market. As long as you’re consistent, you don’t get sucked into trading frequently to manage short term ups and downs. Your target allocation might be off a few percent some of the year. A TDF might do the same.
When I was younger, I rode out the 2000 and 2008 crises by just continuing to contribute, and not checking in more than a couple times a year. If it was out of balance (like US to ex-US), I would put my new contributions toward the allocation % that was low, rather than exchanging from one to another (not selling low). And buying low is a good thing when it recovers, as the market tends to go up in value over decades.
I’m not an expert, but I’ve learned a lot over the years. Closing in on retirement, you may glide your portfolio toward a less volatile allocation, perhaps over a 5-10 year period, building up the cash reserves and bonds allocation, so you hopefully won’t enter retirement with half of what you planned due to a down market, and you won’t be forced to sell stocks for less while the market is down. You might build up 2-3 years of expenses in cash equivalents. Then when you’re retired, drawing from the account, you could pull from cash equivalents if the market is down, waiting to sell equities when they are strong (sell high).
If you diversify appropriately, like with low cost index funds in proportion to the overall market, you just learn to accept the ups and downs. You may not have much bonds equivalents early on, and they don’t always directly correlate. You keep them for stability, slow growth. If the stock market portion drops 25%, bonds keep your total portfolio from dropping that 25%. A balanced portfolio helps limit the volatility.

I'm currently something of a Fidelity fanboy.
From a Reddit Boglehead perspective, FFNOX is nearly the perfect fund for young-ish investors - less conservative than VASGX, lower expense ratio than any TDF I've ever seen.
But even if you're a "Voo and chill" Boglehead, FXAIX is superb - same thing with a slightly lower NER.
VTI? FSKAX is again the same thing, slightly lower NER.


VXUS? FTIHX outperforms it significantly while still being a passive index.


BND? Try FBND. Higher NER this time, but *far* superior returns.

Something similar to Vanguard TDF glide path should be reasonable:
[https://institutional.vanguard.com/investment/strategies/tdf-glide-path.html](https://institutional.vanguard.com/investment/strategies/tdf-glide-path.html)
You can start with 10% bonds for now, and start to increase it at age 40.

That makes sense. I have a TDF for my 401K. And just opened an individual brokerage (+"backdoor" Roth IRA). Thoughts on how to approach what to invest in those other two accounts? I know taxable brokerage is not good for a TDF. So VT or VTI/VXUS vs VOO/VTI is what I am debating. Seems how much international people actually need is controversial, with some doing 100% S&P 500 or US total stock market; in my case I still have international in my TDF so I am not as concerned with US-focus on those other accounts.

Agreed - and I personally would not want to keep a TDF into retirement since I'd want the option to choose to sell more bond or equities each year depending on market conditions. But their purpose is to not need to know anything about that and take care of themselves for years.

Perhaps the middle ground in this debate is acknowledging the subject will need to work much longer than the desired retirement age (which is her current age, essentially). That means sure, pick a TDF, but it might need to be a 2045 target or something

>My 401k options through the company I work for aren’t very extensive so most of that I have allocated in an S&P equity index fund right now. There are also target date funds, a couple bond options, and then a Kroger stock option.
What are the target-date funds in your 401k plan? Vanguard? BlackRock? Fidelity? Without knowing more about your specific financial situation, I'd just say that in general an index-based (i.e. not actively managed) target-date fund with a suitable date is often an excellent option when you're faced with a somewhat limited menu in an employer's plan.
>The HSA has vanguard target date funds, a black rock portfolio fund, an ishares S&P fund, ishares bond fund, plus a couple mid cap funds
A Vanguard TDF wouldn't be a bad solution in the HSA but it would be useful to know more about the other funds available to you. Also, you could always open your own HSA at Fidelity and periodically transfer funds from your employer HSA to the Fidelity HSA and invest them as you see fit. I do this and have my Fidelity HSA in 100% VT. But that does introduce the additional work of making sure you do those periodic transfers.

I disagree - at her age and that amount of savings likely need to be more aggressive than a TDF that is basically meant for someone already in retirement. Unfortunately, she is in a situation where she will have to take a bit more risk than is optimal at that age. Just my $0.02 though.

You'd have plenty of time to reallocate if necessary. For now, in this moment, go with the retirement date +10 year TDF. If down the line you want to reallocate you can. Most will even let you adjust how both current holdings and future pay are allocated. So you could leave the TDF alone, then just switch future pay to different options.

Assuming a starting zero balance, a constant 23K annual contribution, and a 7% nominal return, after **40** years the difference between 0.08% ER for the TDF and 0.02% for the S&P 500 + Total Bond fund portfolio amounts to $122K.
The problem is that your S&P + Bond portfolio adds uncompensated risk by omitting international equities. It's also more prone to behavioral errors compared to the simplicity of a TDF, because it will require OP to manually rebalance and manually change asset allocation over time as OP's risk tolerance and time-to-retirement change. Solving for those problems is well worth the 0.06% for many investors.

A TDF pretty closely matches a 3-fund portfolio which is in alignment with Boglehead principles.

Yea I always just pick the TDF that’s furthest out. Will probably reallocate when I retire anyways.

I’ll get downvoted for this but dont do TDF. Just stick with Fidelity 500 Index

Some combination of the Fidelity index funds or the appropriate TDF.