TDIF vs sp500 % return

I know that sp500 return is around 10% which Jeremy uses for his examples… but what is the return of a TDIF ? Why doesn’t Jeremy use TDIF in his examples?
Honest question! Just trying to learn:)

Hey Ala!

The reasons I don’t use a lot of historical TDIF returns in my examples are as follows:

  • They’re relatively new. For example, Vanguard’s target retirement funds were created in 2003.
  • Since they’re so simple, the returns could be calculated going back further than that, but international stock index funds also aren’t THAT old, meaning we still wouldn’t get that long of historical data
  • The S&P 500 (or total US stock market) has a long and easy to look up track record, making it really convenient for analysis.
  • The next hundred years probably won’t look like the last 100 years. It’s a much more globalized world so a global portfolio (like that inside of a TDIF) may resemble what the US stock market looked like over the last 100 years.

So… I love TDIFs for their low fees, diversified asset allocation, auto rebalancing and reallocating, but they’re just not great for having a long, easy to look up track record. But based on investing best practices, I don’t think it’s crazy to learn from what the US stock market has done over the last 100+ years and invest in a more diversified fashion going forward.


Thank you very much Jeremy for the thorough reply. I am so happy that I received an answer from you!