Actually, I've tried doing that. It worked for a while until one at I thought, "does Vanguard keep the course?" Turns out that when you look at it, they've made numerous "tweaks" throughout the years, and often bad calls. They definitely chase performance. Increased stock allocation right before the housing bubble crash. Increased international allocation when they saw it was performing well. Besides, they hold international currency-hedged bonds, something that no one seems to be able to come up with a good reason for.
> Turns out that when you look at it, they've made numerous "tweaks" throughout the years, and often bad calls... Increased stock allocation right before the housing bubble crash.
So what? If your target retirement date was 20+ years in the future, this is arguably the right call. If your retirement date was closer, they still more heavily weighted you toward safer assets.
The fact that they did this before a market crash is irrelevant — nobody can predict these things with any reliability. Not you, not me, not Vanguard.
> They definitely chase performance.
They definitely do not.
> Increased international allocation when they saw it was performing well.
Increased international allocation to track overall market better.
> Besides, they hold international currency-hedged bonds, something that no one seems to be able to come up with a good reason for.
From their website: The fund employs currency hedging strategies to protect against uncertainty in future exchange rates, so investment returns are expected to reflect the underlying performance of international bonds.
