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120 minus your age is how much of your investment portfolio you should have invested in stocks, that’s what the old adage says anyway. So, with the adventof all these target retirement/lifecycle funds, we can now compare how the professionals allocate assets in an easy and transparent way. Since target retirement type funds are still pretty new and everyone is still trying to get their asset mix correct, it’s interesting to see how different brokerages differ in their offerings.

Process: What I’ve done is taken the target retirement and lifecycle funds at Vanguard, Fidelity, and T. Rowe Price and compared them against the “120 minus age” rule to see how they differed. I assume that the year is 2006, assume retirement is at 65, and extrapolate the stock percentage as 120 minus age, which I extrapolate. For example, given Vanguard’s Target Retirement 2040, I’ll assumethat the current age of an investor is 25, for a recommended allocation of 95% (120 – 25) compared toan actual allocation of 87.72%, a deviation of -7.28%.

The numbers will follow but here are some takeaways (Ididn’t do any statistical analysis, this is just me eyeballing numbers and drawing conclusions that are probably not statistically significant):

*. The rule of thumb is certainly good in terms of rules of thumb, I wouldn’t follow it to the ends o f the Earth but it’s definitelybetter than nothing.

*. None of the three seem tofollow the rule with any sort of consistency but they are all in the ballparkof the rule, but not by much.

*. Of the three, Vanguard is the closest to following therule with T. Rowe Price between somewhat more aggressive and Fidelity being somewhat more conservative.

*. What’s interesting is that all three brokerages are more conservative than the rule recommends on the...