I don't know what I'm doing

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chrisinky
Posts: 1
Joined: Mon Sep 25, 2017 7:28 pm

I don't know what I'm doing

Post by chrisinky »

I currently have 50% in the C and 50% in the S funds. I don't expect to retire until 2040. I'd love to have as close to a million as possible by retirement. Should I keep doing what I'm doing or should I do a lifecycle fund? I'm clueless. According to the TSP calculator, I'll only have 600k by retirement.

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: I don't know what I'm doing

Post by evilanne »

Welcome to the forum. The most popular topics at TSPcenter are the seasonal strategies, both monthly & daily. Start with Aitrius' thread Seasonal Musings 2017: viewtopic.php?f=14&t=13214&p=53759#p53759 (read 1st several pages) & also Recommended Reading: viewtopic.php?f=14&t=13474

crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Re: I don't know what I'm doing

Post by crondanet5 »

Also check out where the Leaders have invested their money.

Are you maxed out contribution-wise?

Any chance of promotion to increase the amount contributed to your TSP Account?

OkieTSPer
Posts: 119
Joined: Mon Jun 06, 2016 2:44 pm

Re: I don't know what I'm doing

Post by OkieTSPer »

Welcome. You're off to a good start. As evilanne said, check out Aitrius' thread Seasonal Musings 2017 and think over your answers to crodanet5 questions. Good luck.

searight
Posts: 85
Joined: Wed Jan 16, 2013 8:56 am

Re: I don't know what I'm doing

Post by searight »

Most important pay yourself first, if you want a healthy TSP you have to put money into it. I recommend starting with the 5% minimum, and then start increasing it to the max every time you get a raise, so it is less painful.

After that here are a some of my rules that I go by:

1. I never put anything into the G fund or L funds since they all have some G. The G fund barely keeps up with inflation and is a long time loser.
2. The C and S have gone up and down over the years but every time they go down they are higher 2-3 years later. Since I am more than 2-3 years from removing the money from TSP, I keep most in these funds.
3. The F fund usually goes the opposite direction of the C and S, so if you feel the stocks are over valued move some into F.
4. We do not have a fund for a hedge against inflation, but we do have one for a drop in the US dollar. I put a little in the I Fund if I feel that the dollar may drop.
5. Seasonal investing has some merit, but if people knew 100% of where the market was going they would have unlimited wealth. I move some of my TSP based on seasonal, but I do not go all in.
6. Also, you have to look a bit at what you see. Are stocks over-valued? Is war a possibility? Are companies making great profits?

So my TSP is currently:
30% C
30% S
10% I
30% Seasonal (Currently F)

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hytid
Posts: 42
Joined: Fri Dec 02, 2016 9:01 am

Re: I don't know what I'm doing

Post by hytid »

If you're here, you have a better idea of what you're doing than everyone who isn't here.

If you are of the belief that the market can be timed and that you have an advantage, you want to maximize that advantage (e.g. 100% allocations IAW your plan). If your plan is actually an advantage, you will realize a positive return over the long term even if there might be short-term dips.

Just make sure to put your emotion (AKA fear or insecurity) in a shoebox and bury it for the next 20 years or so.

Welcome aboard.

(Personally, I increase my contributions by at least 1% whenever a COLA is goes into effect as a Christmas present to myself. I'd enrolled in dental/vision in previous years.)

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repinda808
Posts: 209
Joined: Fri Sep 13, 2013 3:18 pm

Re: I don't know what I'm doing

Post by repinda808 »

searight wrote:Most important pay yourself first, if you want a healthy TSP you have to put money into it. I recommend starting with the 5% minimum, and then start increasing it to the max every time you get a raise, so it is less painful.

After that here are a some of my rules that I go by:

1. I never put anything into the G fund or L funds since they all have some G. The G fund barely keeps up with inflation and is a long time loser.
2. The C and S have gone up and down over the years but every time they go down they are higher 2-3 years later. Since I am more than 2-3 years from removing the money from TSP, I keep most in these funds.
3. The F fund usually goes the opposite direction of the C and S, so if you feel the stocks are over valued move some into F.
4. We do not have a fund for a hedge against inflation, but we do have one for a drop in the US dollar. I put a little in the I Fund if I feel that the dollar may drop.
5. Seasonal investing has some merit, but if people knew 100% of where the market was going they would have unlimited wealth. I move some of my TSP based on seasonal, but I do not go all in.
6. Also, you have to look a bit at what you see. Are stocks over-valued? Is war a possibility? Are companies making great profits?

So my TSP is currently:
30% C
30% S
10% I
30% Seasonal (Currently F)


searight,

Good advice, but I have to differ on your opinion of seasonal investing. Aitrus has been posting about this for just the past few years, and the daily seasonal is only starting to catch on this year. There hasn't been enough time for folks to build that "unlimited wealth" you're looking for. Give it a bit more time. I truly think that seasonal investing in the core funds is the key to maximizing your TSP, and I'm glad to see that you're trying it, even if it's only partially.
2020 Seasonal Strategy 86299

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TSPsmart
Posts: 212
Joined: Fri Nov 14, 2014 12:24 pm

Re: I don't know what I'm doing

Post by TSPsmart »

Pay yourself first is great advice.

Seasonal investing can help, but you have to decide if you are going to be a trader moving in and out of the market often, or want to be more hands off. If you want to be hands off, you can take a look at my post on the unfavorable season for stocks.

I took a look at how sitting in the G fund the half of the year that is weakest for stocks beats buy & hold in the long run and can lead to a larger nest egg. There are many variations of seasonal investing - this is the simplest to execute.

Searight stated that everytime the C and S fund go down they are higher in 2 - 3 years. He must only have his charts set on less than 9 years. The two indexes the funds track both lost over 50% twice since 2000 in bear markets. From the 2000 top, it took the market 13 years to move higher.

Please read into thin air to understand the stock market is flirting with the same valuation levels seen in 1929 and 2000 and how we got here. The great depression accompanied the 1929 market top and monetary mismanagement lead to the financial crisis after the 2000 and 2007 market tops.

I am not waving the red flag, just the yellow flag of caution. If you want to reach a million dollars by 2040, you will need to step aside from stocks and into the G fund when the great reset happens.

I honestly do not think the C fund or S fund will be any higher in 10 years. But a seasonal investor who avoids the largest part of any market correction will do fine.

With that said, the markets remain within a rising price channel at this time even though we are in the unfavorable season for stocks. I see this as a result of the central banks creating money out-of-thin-air and buying up a large supply of the global financial assets, reducing supply and thus driving their prices higher. At some point, all of this is going to end badly.

Roguejim
Posts: 44
Joined: Sun May 07, 2017 7:36 pm

Re: I don't know what I'm doing

Post by Roguejim »

You should visit the Boglehead's forum for anither perspective.


cashworth
Posts: 122
Joined: Mon Jul 03, 2017 11:18 am

Re: I don't know what I'm doing

Post by cashworth »

TSPsmart wrote:I honestly do not think the C fund or S fund will be any higher in 10 years. But a seasonal investor who avoids the largest part of any market correction will do fine.

With that said, the markets remain within a rising price channel at this time even though we are in the unfavorable season for stocks. I see this as a result of the central banks creating money out-of-thin-air and buying up a large supply of the global financial assets, reducing supply and thus driving their prices higher. At some point, all of this is going to end badly.


That's quite the strong message on overvaluation! No inflation, no growth for 10 years?

skiehawk11
Posts: 2116
Joined: Wed Jan 05, 2011 2:32 pm

Re: I don't know what I'm doing

Post by skiehawk11 »

I personally don't "time" the market anymore with index funds/ETFs. I have time on my side to spread out risk of large drawdowns. I simply want to own as much as I can of the U.S. equity markets. After all valuations are simply what another person will pay for it. I'm personally investing in the future earnings of the entire stock market or in this case smallcap and midcap value sectors.

For the TSP, I'm 100 percent in the S fund and if the stock market drops 50 percent in the next 10 months, I'll still do nothing. My contributions won't change either. According to my Monte Carlo simulations, I need to invest 15 percent of my income (I'm investing over 20% right now into the TSP) into equities for the next 18 years. If I retire in a 50 percent drawdown period, my balance should be enough so I can withdraw 3 percent a year to maintain my income I've set for myself. All calculations are done in today's dollars.

For individual stocks I look at fair price valuations or solid companies that have been hit hard (Under Armour as an example). It's slightly different, but when I decide to buy a company I really want to see how steady their earnings are, how much market share they have (and maintained), and finally I wait for a fair price which I generally use price/earnings, price/book, or price to free cash flow to consider (depends on the industry the company is in).

japan357
Posts: 2
Joined: Mon Oct 16, 2017 9:23 am

Re: I don't know what I'm doing

Post by japan357 »

I appreciate you posting this. Just joined and I have a ton to learn but appreciate this forum. I invest about 15% towards my TSP, and a little extra into a roth IRA. I'm all in the L2050 for now. I need to learn more about the other funds and seasonal investing. Reading some investment books too. Will be following all of the links and threads on this forum!

mindofmush
Posts: 353
Joined: Mon Jul 02, 2012 1:38 pm

Re: I don't know what I'm doing

Post by mindofmush »

chrisinky wrote:I currently have 50% in the C and 50% in the S funds. I don't expect to retire until 2040. I'd love to have as close to a million as possible by retirement. Should I keep doing what I'm doing or should I do a lifecycle fund? I'm clueless. According to the TSP calculator, I'll only have 600k by retirement.
50% C and 50% S funds returns over the last 14 years have averaged about 10% annually. That's better than any lifecycle fund. You'll find more reasons not to use the lifecycle funds on TSPaul's website http://www.tspallocation.com/ as well as information about economic cycles, emergency funds and TSP loans.

Also remember that your TSP will continue to grow exponentially after 2040 even without contributions. You aren't required to stop investing your TSP just because you retire.
mo meng, mo ching (which loosely means: no money, no life)

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evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: I don't know what I'm doing

Post by evilanne »

Welcome Japan 357. From Aitrus' signature--a good place to start with seasonal
Seasonal Musings 2017: http://tspcenter.com/forums/viewtopic.p ... 759#p53759
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
You can't outrun Death forever. But you can sure make him work for it.
He addresses each of the 5 primary funds

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Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

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