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Will funds that have dates to retire on them go down as it gets closer? |
If you invest in one of those funds that is set up for people who want to retire in 2030, meaning it moves the money into lower risk stuff as it gets closer to that date. Wont those funds go down in value as people start to sell them to retire? If everyong starts selling out of the fund in 2030, wouldn't it go down in value because of all the selling? Or do I not understand how the funds work. Presumably these funds invest in real stocks. When the investors sell their units, the fund sells a corresponding chunk of stocks at market value. So, no big deal, unless the fund is huge and tens of thousands redeem at the same time, in which case it may drive the entire stock market down and the stocks will not sell at good prices. But this is unlikely. |
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