Episode Transcript
[00:00:00] Speaker A: Thank you for tuning in to Investment Insight presented by McKay Wealth Advisory. My name is Hayden Proffitt. Joining us today, we have Brent McKay. Brent, target date funds, they're holding quite a bit of value now, right?
[00:00:09] Speaker B: So target dates funds have become one of the most popular investment products. Most people that have a 401k are automatically put inside a target date fund. As of 2024, there's over $4 trillion put in Target date funds in the United States. But the target date, so what that means, of course is they assume every person is the same, everybody has the same risk level, everybody has the same goals and desires, is going to retire at a certain year.
And so one of the challenges of the target date fund is they're not based on you, they're based on that date.
And so we firmly believe that every person that's investing should build a long term financial plan based on their risk level, how much, you know, when the market goes down, they're willing to accept how much they're willing to try to make on their investments. It needs to be individually targeted based on their unique goals and circumstances. And the target date could be a part of that, but it's probably not the best way to go when you're building a portfolio. A lot of target date funds will put products in there that are more expensive or have a different investment in it or even overlap. A lot of them even overlap inside the internal fund. And so they don't offer as broad of a diversification as you can get by individually selecting the funds.
And we are happy at our office to tailor a strategy. We don't charge any money currently for setting up a portfolio of funds in there, and usually it'll save you some money on your investment portfolio. But target A funds are a big growing thing and they're the default for most people, right?
[00:01:44] Speaker A: If your employer already has a 401k and you automatically enroll into it, it's more than likely going to get automatically enrolled and contributed into a target date fund. So let us help you, right?
[00:01:52] Speaker B: Let us help you build that investment strategy. We've got models for a lot of the 401ks for people in the area. So literally in five or six minutes we can get it out to you after you built a plan, and then once a year we can reevaluate it, which these target A funds, they're probably going to move about once a year too.
So you're getting usually a lower cost or more importantly, a better product, a better type of investment strategy.
[00:02:22] Speaker A: And that's the goal well, thanks for talking to us about this today, and thank you for tuning in as well. Hope you have a great day.
