Target-Date Funds

Q What are “lifecycle” funds, and should I invest in them? — M.D., St. Augustine, Florida

A They’re often referred to as “target-date” funds and are meant to help you invest for retirement.

People are often advised to hold mostly stocks when they’re young and to shift toward bonds as they age. That can be a bother, so target-date funds do it for you. Each is focused on a particular year when shareholders would be expected to retire, and its asset allocation is adjusted over time as retirement approaches. If you plan to retire around 2040, for example, you might buy into a “2040” fund that will gradually shed stocks and add bonds over time.

Target-date funds vary widely, though. Before investing in one, consider each candidate’s fees, holdings and performance. (Funds with the same target year can have different allocation mixes.) Keep your big picture in mind, too. You might invest $25,000 in a targetdate fund with an 80-20 stock-bond ratio, but if you hold $100,000 in bonds separately and your retirement is 25 years away, your overall asset allocation might not be what you want or need it to be.

Learn more about retirement strategies and investments at fool.com/retirement/index.aspx and money.cnn.com/retirement, and in our “Rule Your Retirement” service (fool.com/services), which offers solid, concise advice, along with stock and fund recommendations.

*** Q How do I sell a stock when I have the stock certificates? — C.U., Erie, Pennsylvania

A You can deliver them to your brokerage, which can then sell them for you, or you can ask the company what transfer agent it uses and sell through the agent. Sign the certificates first at a bank or institution that can stamp them with a “medallion signature guarantee.”