Reply to thread

Message

<blockquote data-quote="Ms.PacMan" data-source="post: 1819583" data-attributes="member: 4656">The Bright Horizon funds are merely different percentages of stocks and bonds depending on your retirement date. The farther out the retirement target (2035) the higher percentage of stocks.The thought is that bonds are less risky than stocks because in a company bankruptcy bond holders are paid first and stock holders usually get pennies on the dollar, if anything at all. So that school of thought&nbsp; says that the closer you get to retirement the more bonds you should hold in your portfolio to mitigate the risk of losing money.Personally I think that might have been prudent when people were just buying individual stocks but now with index funds that hold maybe only 1% or less of a hundred or more companies stocks, one bankrupt company is unlikely to upset the apple cart and failing companies are usually delisted from the S&amp;P 500, 400, etc long before they fail. Anyway, I don&#039;t like the word risky when it comes to index funds....volatile, yes.<a href="http://slickcharts.com/sp500" target="_blank">http://slickcharts.com/sp500</a>This is a composite and weighted chart of the S&amp;P 500. It shows all of the companies and how much of a percentage goes towards the total. Every S&amp;P 500 index fund will mimic this as closely as possible.</blockquote>

[QUOTE="Ms.PacMan, post: 1819583, member: 4656"] The Bright Horizon funds are merely different percentages of stocks and bonds depending on your retirement date. The farther out the retirement target (2035) the higher percentage of stocks. The thought is that bonds are less risky than stocks because in a company bankruptcy bond holders are paid first and stock holders usually get pennies on the dollar, if anything at all. So that school of thought says that the closer you get to retirement the more bonds you should hold in your portfolio to mitigate the risk of losing money. Personally I think that might have been prudent when people were just buying individual stocks but now with index funds that hold maybe only 1% or less of a hundred or more companies stocks, one bankrupt company is unlikely to upset the apple cart and failing companies are usually delisted from the S&P 500, 400, etc long before they fail. Anyway, I don't like the word risky when it comes to index funds....volatile, yes. [URL]http://slickcharts.com/sp500[/URL] This is a composite and weighted chart of the S&P 500. It shows all of the companies and how much of a percentage goes towards the total. Every S&P 500 index fund will mimic this as closely as possible. [/QUOTE]

Verification