Contributions Discussion
Moderator: Aitrus
- repinda808
- Posts: 209
- Joined: Fri Sep 13, 2013 3:18 pm
Contributions Discussion
I've been testing something out in my real TSP and would like to begin a pro/con discussion regarding Contributions. Over the past 6 months, I thought I'd try to take advantage of what I considered would be a weak I Fund by switching my Contributions to 100% I fund, leaving the rest of my account holdings in C fund. With the recent uptick in I, I'm looking to selling off my shares in I and trying to buy an opportunity in F, which is the most underperforming fund at the moment. Seeing weakness there, I'm also thinking about swapping my Contributions to 100% F for the next 4 months.
The reason I say 4 months is derived from something I read in the C and S trends thread where Aitrus' look back results showed that June was a bad month for the equity funds. With that in mind, I'd switch my Contributions to buy 100% C or S, IFT the rest of my holdings into F or G, and ride out the month before buying back into C or S just before the end of June. Depending on how far the possible pullback is in June, I could keep my contributions the same or switch to another fund at that time.
After letting my TSP run on autopilot the past couple of years, I'm looking to once again try to beat the Indexes this year. Any thoughts or comments on my idea would be welcome, as I'm looking to IFT my I fund holdings, and maybe a little of my C (a total of 25-30%), into F within the next 24 hours. I've still got a week and a half for the Contribution portion to kick in on my next paycheck, so feel free to offer your opinions on that as well.
The reason I say 4 months is derived from something I read in the C and S trends thread where Aitrus' look back results showed that June was a bad month for the equity funds. With that in mind, I'd switch my Contributions to buy 100% C or S, IFT the rest of my holdings into F or G, and ride out the month before buying back into C or S just before the end of June. Depending on how far the possible pullback is in June, I could keep my contributions the same or switch to another fund at that time.
After letting my TSP run on autopilot the past couple of years, I'm looking to once again try to beat the Indexes this year. Any thoughts or comments on my idea would be welcome, as I'm looking to IFT my I fund holdings, and maybe a little of my C (a total of 25-30%), into F within the next 24 hours. I've still got a week and a half for the Contribution portion to kick in on my next paycheck, so feel free to offer your opinions on that as well.
2020 Seasonal Strategy 86299
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- Posts: 4330
- Joined: Tue Aug 19, 2008 8:51 pm
Re: Contributions Discussion
The F Fund is doomed in the clutches of Yellen. Interest rates are rising, not falling. As long as the rates rise the share price of the F Fund will fall. If you want to make money stay out of the F Fund.
Re: Contributions Discussion
repinda808 wrote:I've been testing something out in my real TSP and would like to begin a pro/con discussion regarding Contributions. Over the past 6 months, I thought I'd try to take advantage of what I considered would be a weak I Fund by switching my Contributions to 100% I fund, leaving the rest of my account holdings in C fund. With the recent uptick in I, I'm looking to selling off my shares in I and trying to buy an opportunity in F, which is the most underperforming fund at the moment. Seeing weakness there, I'm also thinking about swapping my Contributions to 100% F for the next 4 months.
The reason I say 4 months is derived from something I read in the C and S trends thread where Aitrus' look back results showed that June was a bad month for the equity funds. With that in mind, I'd switch my Contributions to buy 100% C or S, IFT the rest of my holdings into F or G, and ride out the month before buying back into C or S just before the end of June. Depending on how far the possible pullback is in June, I could keep my contributions the same or switch to another fund at that time.
After letting my TSP run on autopilot the past couple of years, I'm looking to once again try to beat the Indexes this year. Any thoughts or comments on my idea would be welcome, as I'm looking to IFT my I fund holdings, and maybe a little of my C (a total of 25-30%), into F within the next 24 hours. I've still got a week and a half for the Contribution portion to kick in on my next paycheck, so feel free to offer your opinions on that as well.
I like this idea, but I would suggest for the short-term to stay in equities or you might miss out on the ride up. Yet, this time is unusual. I think a seasonal is the way to go (under normal circumstances). What I'm doing is going to 100% F in June and then in July throw myself back into the equities. When I do this, I will try to leave around 10% in F or so and every time there is a loss of 2 days or more, buy up some equities from that F reserve. Oh and another thing I'm hoping to do is to buy those equities a week early so I gain access to the cheaper prices (and maybe lose a little too).
Up until now, I had been throwing 5% in the F to do this strategy, but it has been under performing so much and the equities have been doing so amazing that I didn't want to miss out anymore.
Best,
Me
Re: Contributions Discussion
Agree with cron. Interesting idea changing the contribution strategy though, hadn't considered that. I think with a 4 month timeline, even if you would ideally pick the four months the seasonals are typically in F, Jun-Sep, you're missing so much of a potential upside in the market that it wouldn't pay off. Seasonal strat wise, F might be best for a month at a time, I haven't done the math but I'd expect it to seriously lag the other indices no matter what 4 months you look at.
Not to hijack the thread, but while we're talking contribution strategy, what does everyone have their money going into? I've always left 100% C, and just do a full transfer into whichever fund each month.
Not to hijack the thread, but while we're talking contribution strategy, what does everyone have their money going into? I've always left 100% C, and just do a full transfer into whichever fund each month.
"60% of the time, it works every time."
- repinda808
- Posts: 209
- Joined: Fri Sep 13, 2013 3:18 pm
Re: Contributions Discussion
Crondanet,
That's exactly why I mean to buy into the F with my Contributions. What's already in C, will stay there, but only my current contributions will buy F, rather than trying to by the equities that are at all time highs. My short term move to F today is just to save a little from the 7 day run up we've seen this month. I plan to buy back in early next week.
Anyway, thanks everyone for the comments. Good luck to all!
That's exactly why I mean to buy into the F with my Contributions. What's already in C, will stay there, but only my current contributions will buy F, rather than trying to by the equities that are at all time highs. My short term move to F today is just to save a little from the 7 day run up we've seen this month. I plan to buy back in early next week.
Anyway, thanks everyone for the comments. Good luck to all!
2020 Seasonal Strategy 86299
Re: Contributions Discussion
rhetorics,
My contributions are always 100% toward whatever Fund I'm in for the month. I did a study on putting money in the G Fund and then using it to buy into stocks after a "flash crash", but the math doesn't support that kind of strategy. Easier to just match contributions to the Fund of the Month.
Edit: Here's some threads and posts from a while back where I researched this idea.
http://tspcenter.com/forums/viewtopic.php?f=14&t=10199
http://tspcenter.com/forums/viewtopic.php?f=14&t=12164
My contributions are always 100% toward whatever Fund I'm in for the month. I did a study on putting money in the G Fund and then using it to buy into stocks after a "flash crash", but the math doesn't support that kind of strategy. Easier to just match contributions to the Fund of the Month.
Edit: Here's some threads and posts from a while back where I researched this idea.
http://tspcenter.com/forums/viewtopic.php?f=14&t=10199
http://tspcenter.com/forums/viewtopic.php?f=14&t=12164
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com
- repinda808
- Posts: 209
- Joined: Fri Sep 13, 2013 3:18 pm
Re: Contributions Discussion
Aitrus,
Thanks for your input. That's exactly the information I was looking into. I really appreciate all the research you share with us on this site.
Mahalo!
Thanks for your input. That's exactly the information I was looking into. I really appreciate all the research you share with us on this site.
Mahalo!
2020 Seasonal Strategy 86299
Re: Contributions Discussion
Your idea is really good though, so please don't shelf it as of yet. You're going from a seasonal strategy that tries to ride the high wave to a seasonal strategy that buys low and sells high.
I am doing something like that (but a bit more modified). Whenever I go 100% F in August, September, October, I'm thinking of leaving some in the F Fund to buy up shares in a losing fund. Now, I could just put it all in equities from the beginning, but this allows me to slightly hedge the bets if there is a market correction after October (I know that this rarely happens). I'm suggesting a modified way of looking at your strategy, although your strategy is good.
Think about it from another point of view though. If you buy F at a low, the amount that F would ever be at a high would not get as high as a C, S or I. For example, F will probably not beat 4% (maybe 5%?) for a month...if ever...and the C, S and I have already proven that over 3% is possible in a month. So, while your idea is good (buy low, sell high), you would not be gaining too much in selling F at a high point as opposed to hanging out in the equities and riding the wave.
Does that make sense?
Best,
Me
I am doing something like that (but a bit more modified). Whenever I go 100% F in August, September, October, I'm thinking of leaving some in the F Fund to buy up shares in a losing fund. Now, I could just put it all in equities from the beginning, but this allows me to slightly hedge the bets if there is a market correction after October (I know that this rarely happens). I'm suggesting a modified way of looking at your strategy, although your strategy is good.
Think about it from another point of view though. If you buy F at a low, the amount that F would ever be at a high would not get as high as a C, S or I. For example, F will probably not beat 4% (maybe 5%?) for a month...if ever...and the C, S and I have already proven that over 3% is possible in a month. So, while your idea is good (buy low, sell high), you would not be gaining too much in selling F at a high point as opposed to hanging out in the equities and riding the wave.
Does that make sense?
Best,
Me
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Re: Contributions Discussion
crondanet5 wrote:The F Fund is doomed in the clutches of Yellen. Interest rates are rising, not falling. As long as the rates rise the share price of the F Fund will fall. If you want to make money stay out of the F Fund.
cron, that's not true. The F fund reflects the total price including yield. This will go up an down depending on how attractive bonds are to reduce volatility in portfolios.
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- Posts: 4330
- Joined: Tue Aug 19, 2008 8:51 pm
Re: Contributions Discussion
I see you have none in your Fantasy holdings.
Re: Contributions Discussion
Aitrus wrote: My contributions are always 100% toward whatever Fund I'm in for the month. I did a study on putting money in the G Fund and then using it to buy into stocks after a "flash crash", but the math doesn't support that kind of strategy. Easier to just match contributions to the Fund of the Month.
Since I discovered the world of IFTs, I have found it less complicated to send all my new contributions to G, rather than hope that my bi-weekly Friday contribution occurs just before a fund goes up. However, I am curious about the seasonality of bi-weekly prices.
“The genius of investing is recognizing the direction of the trend – not catching the highs or the lows.”
- Dean Witter
"Put all your eggs in one basket and then watch that basket."
- Andrew Carnegie
- Dean Witter
"Put all your eggs in one basket and then watch that basket."
- Andrew Carnegie
Re: Contributions Discussion
The bi-weekly paychecks of federal employees and their contributions into the TSP has very, very little effect on the market. Other things, such as quarterly dividends, end of year bonuses in the private sector, and earnings reports play a much bigger role.
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com
Re: Contributions Discussion
Aitrus wrote:The bi-weekly paychecks of federal employees and their contributions into the TSP has very, very little effect on the market. Other things, such as quarterly dividends, end of year bonuses in the private sector, and earnings reports play a much bigger role.
I was thinking that as most salaries are paid on a bi-weekly basis, so most 401(k) plans should also be.
“The genius of investing is recognizing the direction of the trend – not catching the highs or the lows.”
- Dean Witter
"Put all your eggs in one basket and then watch that basket."
- Andrew Carnegie
- Dean Witter
"Put all your eggs in one basket and then watch that basket."
- Andrew Carnegie
Re: Contributions Discussion
I'm not sure how often salaries are paid in the private sector. I only ever got paid either monthly or on the first and 15th, but then that was my high school job at Taco Bell, which isn't exactly a corporate position.
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com
Re: Contributions Discussion
12squared wrote:Aitrus wrote: My contributions are always 100% toward whatever Fund I'm in for the month. I did a study on putting money in the G Fund and then using it to buy into stocks after a "flash crash", but the math doesn't support that kind of strategy. Easier to just match contributions to the Fund of the Month.
Since I discovered the world of IFTs, I have found it less complicated to send all my new contributions to G, rather than hope that my bi-weekly Friday contribution occurs just before a fund goes up. However, I am curious about the seasonality of bi-weekly prices.
That's an interesting idea. So you place everything in the G Fund (new contributions) and when stocks are low you buy (e.g. late October)?
Me
Fund Prices2024-04-16
Fund | Price | Day | YTD |
G | $18.19 | 0.01% | 1.24% |
F | $18.58 | -0.32% | -3.33% |
C | $79.08 | -0.21% | 6.34% |
S | $76.95 | -0.41% | -0.18% |
I | $40.73 | -0.98% | 1.37% |
L2065 | $15.67 | -0.50% | 3.66% |
L2060 | $15.67 | -0.50% | 3.67% |
L2055 | $15.68 | -0.50% | 3.67% |
L2050 | $31.50 | -0.44% | 2.93% |
L2045 | $14.38 | -0.41% | 2.81% |
L2040 | $52.59 | -0.38% | 2.72% |
L2035 | $13.91 | -0.35% | 2.60% |
L2030 | $46.37 | -0.32% | 2.50% |
L2025 | $12.95 | -0.18% | 1.90% |
Linc | $25.31 | -0.14% | 1.64% |