Q. I’ve always managed my own investments but with the recent stock market fall, I’ve considered using a target fund instead. What are the advantages and disadvantages?
— Long time to go

A. It’s understanding that you may want a hand managing your investments, especially with the recent volatility of the stock market.

Target-date funds are composed of several funds representing different investment styles or asset classes, said Alan Meckler, a certified financial planner with Cornerstone Financial Group in Succasunna.

“As their name suggests, they have a target date, such as 2020, 2030 or 2040, for retirement,” Meckler said. “The investment firms running these funds make the asset allocation decisions on behalf of investors based on the target date.”

Meckler said target-date retirement funds try to make a complicated scenario — how to invest over 30 or more years — simple. Or at least simpler. They generally start out more heavily weighted in equities, then grow more conservative as your retirement date draws closer.

This type of fund does not guarantee a particular return or eliminate the risk of loss, but it brings a level of portfolio management and complexity that is typically out of reach for most investors, Meckler said.

“One advantage of target-date funds is that they take the responsibility for rebalancing out of the investors’ hands,” he said. “Even if investors do a great job of picking the right funds initially, it’s unlikely they’re going to review and rebalance them every quarter.”

Rebalancing a portfolio can require selling what’s doing well so that you don’t become overinvested in one particular asset, Meckler said, and it can be hard for people to sell the funds that are doing well and to buy the ones that aren’t. Having someone else do the rebalancing takes the emotion out of it.

On the other hand, simplification may be part of the problem, he said. Target-date funds can be one-size-fits-all, whereas your current situation, risk tolerance, other assets and retirement needs are very individual.

And, he said, most of these funds don’t rebalance often enough.

“They rebalance every few years at best, maybe every four or five years,” he said. “If one had a fund in 2006 or 2007, they went from Dow 9,000 to 14,000 and back again.”

Without fairly frequent rebalancing, investors in these funds may have gotten hurt at the top of the market, with too much equity exposure, and at the bottom of it, with too much fixed-income exposure as the market rebounded, he said.

“Even if you’re not retiring for another 20 years, I suggest examining the company’s target-date fund for current retirees to gauge what your portfolio might look like in the future,” he said. “If there are a lot of volatile assets in there, that could be a problem.”

Karin Price Mueller writes the Bamboozled column for The Star-Ledger and she’s the founder of NJMoneyHelp.com. Click here to sign up for the NJMoneyHelp.com weekly e-newsletter. Like NJMoneyHelp.com on Facebook and follow it on Twitter.