In the last decade, of all the topics I have written about, I received more heat over one topic than any other combined — target date funds. In 2012, when I last warned investors about this group, you'd be shocked at the venom I received. Some of the names I was called cannot be repeated here.

I was told how unprofessional I was along with being nothing more than a con man for slamming this group.

OK, everyone has a right to their opinion.

To start, I will explain what a target date fund is, then analyze their performance. Per Investopedia, a target date fund — also known as a lifecycle, dynamic-risk or age-based fund — is a collective investment scheme, often a mutual fund or a collective trust fund. It is designed to provide a simple investment solution through a portfolio whose asset allocation mix becomes more conservative as the target date (usually retirement) approaches.

For a fair comparison, I designed a performance chart of the market (Standard & Poor's 500) since the bull market began in 2009 and used very popular Vanguard Target Date (low-fee) funds.

The selected funds and the percentage they underperformed the market (SPY); VTWNX Vanguard 2020 Fund (-124 percent), VTTRX Vanguard 2025 Fund (-110 percent), VTHRX Vanguard 2030 Fund (-96 percent), VTTHX Vanguard 2035 Fund (-82 percent), and VFORX Vanguard 2040 Fund (-75 percent). Past performance does not dictate future returns.

Here’s what you need to think about:

First, if holding target date funds, do you know what’s in it and how it is performing?

Second, if so do, you know how an index ETF like SPY is performing?

Third, are you tracking your holdings to monitor their performance?

Fourth, if not, why?

Remember — Wall Street makes its money with us being in the market. We make our money with what we own and when.

Plan your work, work your plan, and share your harvest!

DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy ( and Associate Professor Emeritus of Finance. This column is for educational purposes only and not intended as financial advice. Your decision to buy, sell, short or hold any investment product is a direct result of your decisions, free will, and research. For questions-send to