This issue of a behavioral performance gap and the fact that it is smaller for target-date funds is an important one. There are great funds that the average investor shouldn't own because they don't have the stomach or savvy to know how to own them correctly. For many--not most of the sophisticated people on this board but perhaps your friends and family--a target date fund is a good solution for psychological reasons. The one problem and it is a big one is that these funds are designed around standard portfolio theory that assumes stocks and bonds have a standard risk profile. That theory may be tested soon as rates rise and valuations compress. Will the behavioral performance gap remain narrow then?:
morningstar.com/articles/850872/success-story-targetdate-fund-investors.html
