Sean D. Casterline, CFA

ETF's typically offer lower fees than their open ended counter parts (mutual funds). However, you still have to choose WHICH ETF's to buy. The industry has sold ETF's as the "cure all" to high mutual fund fees. But, investors are still left trying to pick the correct ETF's and all ETF's are not created equal, so be sure to do your research. In our opinion, target date funds are one of the worst areas you can invest. In theory, they sound great. But, in reality, what we've found is that target date funds deliver horrible performance. Take a look at the alpha (a measure of outperformance, or efficiency) on most target date funds and you'll find they deliver NEGATIVE alpha. In translation, this means using them is far less efficient than building your own target date fund using actively managed mutual funds and ETF's.

Historical research shows that 85% of stocks trading below $2 eventually go away. That said, you have a 15% chance of even coming away with ANYTHING. Would you go to a casino that gave you 15% odds? That's probably a bad example with the luck I had the last cruise I was on (ha).

Peter,

One point that hasn't been addressed is that there's a "fatal flaw" as it applies to Target Date funds in that they will be loading up on bonds, the older you get. Because of your age, this comes at a time when interest rates are at an all-time low and bonds have been in one of the greatest bull markets we've seen. So, making a move like that will simply put you into another scenario where you are going to underperform.

Another thing I implied from your info is that you're seeing the equity markets rocket higher and simply aren't satisfied with your returns. In essence, you have a very low allocation to stocks, so you can't benchmark your returns against equity markets. If; 1. You feel you can take more risk, 2. You're not living off the money and don't think you will need to for the foreseeable futre. Then, perhaps it would be more appropriate for you to adjust to a more balanced portfolio (50% stock funds; 50% fixed income funds). You don't need to move the portfolio to do that.