My wife and I are in our 30s and live in the US. We have several retirement accounts, which include an old 401(k), her current 401(k), and my current 403(b).
These 3 all allow us to choose our investments, but until now we have just stuck with the default: 100% in 2050 target date funds. We are realizing now that these accounts have done poorly compared to the S&P 500 for years, and we need to get better returns.
The accounts let us choose from funds that include large cap stocks, small/mid cap stocks, international stocks, industry-specific stocks, short-term bonds, long-term bonds, and/or target date funds.
So I’ve been studying the Investment Performance charts and the individual profiles of each fund. I’ve been plugging in the rates of return and expense ratios into online calculators to try to get a general idea of future performance. (I realize that the market changes and portfolios rebalance, so I’m not treating these numbers as the truth - just trying to get enough of a general idea to feel able to pick from these funds confidently.)
At this point, I see two problems that keep me from making a decision:
First, I don’t know which numbers on the Investment Performance charts would be the most reliable. The charts include 3 month, YTD, 12 month, 3 year, 5 year, 10 year, and since-inception rates of return (sometimes other time ranges, too). And I realize this is all past performance that could change in the future. Are any of these past time ranges generally accepted as reliable when people need to make this kind of decision?
Second, I might have too many good choices - which could hurt or help our overall return long-term. Some of these funds are consistently beating the S&P 500 (and the 2050 target date funds) throughout most or all of these intervals. In large cap stocks especially, I feel like I’m trying to choose between several options that all look very compelling.