Y’all Think I’m Makin’ Stuff Up, Right?

Top panel is American Funds’ set of Target Retirement Funds, and bottom panel is Blackrock’s. Not financial advice, dyor.

a. You can see that the red circle and orange circle: the results are almost exactly alike. HMM: perhaps they are using the singular technique that is described in the video.

b. These funds, over the past 12 months, were nowhere close to the S&P 500’s return. Why? Diversified portfolios, by the hugest investors with unlimited computing power, don’t cherry-pick individual stocks, that’s for CNBC and the media to publicize.

c. The unresolved issue is that these funds can work in Qualified Fund accounts, but there will still be turnover and distributions that can income tax ripple effects for Non-Qualified accounts, which remain unrevealed or misunderstood. The reason that is important? Medicare IRMAA and your health insurance premiums under the ACA. If you are affected, this this could possibly lower your effective return because you get hit by another tax.