Transferring Funds

[sharlotd]

Good Morning,

Im 24 and have been in service for 5 yrs and I have been putting into a G Fund for the past 2.5 yrs now with a total of 7,000. Finally did some research on all the funds and recently just allocated all my future funds to C (36%), S(32%), and I (32%.). I was hoping to get advice on transferring all of my G funds (7,000) into C (36%), S(32%), and I (32%). Good or bad/idea?

Thank you

[Jones44]

Anything is better than the G Fund.

[ajareds92]

I would say that what you have done is definitely better than leaving it in the G fund. The two more prevelant strategies on this forum are the daily seasonal and the monthly seasonal with the daily being a newer idea.

You should read two threads first to get a good understanding of the seasonal concept.

Monthly seasonal thread: http://tspcenter.com/forums/viewtopic.php?f=14&t=13214

Daily seasonal thread: http://tspcenter.com/forums/viewtopic.php?f=14&t=13984
http://tspcenter.com/forums/viewtopic.php?f=14&t=14507

These two strategies essentially try to maximize the flexibility given to us by out TSP accounts (two moves per month with an extra to the G fund) The monthly does a different fund each month based on historical data where the daily does two to three funds a month based on historical data.

It all comes down to personal preference and risk tolerance. The seasonals require a little bit more involvment then buy and hold or the L funds but I would argue they are no more risky then any other strategy and have better promise of higher returns.

At your age, similar to mine I would reccomend putting as much as you can into your TSP. If you don't have it in your bank account you wont miss it. Time is your biggest friend for retirement.

[evilanne]

Welcome to the forum. Suggest you read up on the stock market in general and seasonal investment strategies in particular. Aitrus' Seasonal Musings 2017 thread is a good place to start: http://tspcenter.com/forums/viewtopic.p ... 759#p53759

[Aitrus]

Welcome to the site, sharlotd. Lots of knowledgeable people here, so don't be afraid to ask any questions you might have. Good on you for getting involved in your future, many people don't start thinking about it until it's too late to do much good, and they miss out on years of investment opportunity.

Any money left in the G Fund might not be losing now, but it loses in the long run. The G Fund earns less than inflation, so your $7,000 today won't be able to buy $7,000 worth of stuff in the future. And since the other Funds all go up over time, you lose out on the growth you would achieve if you move your money out of the G Fund.

As for the Funds themselves, the I is the worst performer. It's averaged only about a 4% annual return since 1988. The C has returned an average of about 9-10%, and the S Fund about 11%.

On the site we talk a lot about different investing strategies. It sounds like you might be a buy-and-hold type of investor, meaning that you want to just put your money someplace and keep it there. If this is the case, I would advise a 50/50 split between the C and S Funds. Stay away from the L Funds, those are not aggressive enough to earn a high enough annual return for you to be ready come retirement.

You're young enough that any 1-year loss you might take will be quickly made up in the following years, so don't pull your money out when the market takes a hit. This means you can afford to be more aggressive than the L Funds and the G Fund.

[OkieTSPer]

Welcome. Your off to a good start. Aitrus Seasonal Musings 2017: http://tspcenter.com/forums/viewtopic.p ... 759#p53759 is one of the good reads for getting a better understanding of strategy. It certainly helped me out. Good luck.

[JDD4J4J]

Changing your allocations was a good idea. That being said with many indicators showing that the market is over bought, you may want to wait just a little bit before you do an interfund transfer. Hate to see you loose a good portion of the $7,000 you've saved for 5 years. The end of October is historically a potentially volatile time. May want to wait till the Santa Rally to make your move.

[sunburn]

Welcome. Best to take time and read up on the links provided above. Then pick a plan and stay with it. Good luck.

[novak]

Welcome. Best to take time and read up on the links provided above. Then pick a plan and stay with it. Good luck.

Sounds like good advice. Thanks.

[sharlotd]

I appreciate everyone replies and look forward to reading the links that has been provided. As of right now, for the amount I have accumulated in my G Fund, I have read and understood to initiate a interfund transfer of 50/50 in C and I...OR...just leave the balance in the G Fund? Thank you again for your replies and apologize in my lack of knowledge in this area. I look forward to learning more from this site and "bettering" my financial future.

[maui21ice]

Welcome to TSPcenter! I would definitely say if you are just going to let it ride out over your career and not pay much attention to it, keep it in the C or S fund and then look at it in 30-40 years or so when you're about to retire. As a 24-year old you're off to a good start. Don't let it sit in the G-fund, you're not making any gains!

Best of luck!

[Scorpio70]

When I was 24 the DOW was 2500 pts. The reality is that in 10 to 15 years the Millennial group will be putting a lot of money in the market. At 24 the G Fund is a huge opportunity cost.

The professional money managers that want to actively manage other peoples accounts typically put their money in index funds.

[hytid]

When I was 24 the DOW was 2500 pts. The reality is that in 10 to 15 years the Millennial group will be putting a lot of money in the market. At 24 the G Fund is a huge opportunity cost.

The professional money managers that want to actively manage other peoples accounts typically put their money in index funds.

Same for most roboinvestors / apps, e.g. stash, acorns, etc.

To OP: Your idea is good; might want to jump in mid-December. There are a number of different timing strategies available on here if you want to actively manage it.

You've made the correct first step in coming here.

[12squared]

I appreciate everyone replies and look forward to reading the links that has been provided. As of right now, for the amount I have accumulated in my G Fund, I have read and understood to initiate a interfund transfer of 50/50 in C and I...OR...just leave the balance in the G Fund? Thank you again for your replies and apologize in my lack of knowledge in this area. I look forward to learning more from this site and "bettering" my financial future.

You seem like you are still on the fence about this.

A few years ago, after 19 years of Buy & Hold, I began to take notice of the stock market. After a few weeks, I began to move 100% of my TSP around. I had no idea what I was doing, and had not yet discovered TSPcenter. I switched between funds at their peaks and watched them decline. Only then did I begin keep reading everything I could - to figure out a better plan.

Few - if any - of us are register financial advisors. Don't make decisions based on what anyone thinks will happen. Take a gander at the CNN Fear and Greed Index, and convince yourself that now is the right time to pull out into the fast lane. Otherwise, just open a Fantasy TSP for now, and make moves in it as if it was real money.