nodak wrote:
2.) If “avoid the dips and buys into lows” to achieve a higher return that beats the S&P 500 year-after-year was a viable option, then why does nobody do it? .
Obviously, the phrase “avoid the dips and buys into lows” is too vague to understand even though I referenced the "dips" to the bear markets of 1990, 2001 and 2008. (Only three years in the last 30, not every year.)
Anybody who moved to the G fund in 2008 when the market was dropping and then moved back to the C/S fund anytime in 2009, did in fact "avoid some of the dip and bought into the lows". I was late getting out of stocks but I didn't sell out at the bottom, and I bought the recovery at a lower price than I sold at. Even though I was depressed at the time about taking a loss, later I realized than my account recovered quicker than if I would have just let it ride in a buy&hold forever strategy.
Last edited by mindofmush on Sat Apr 28, 2018 10:49 am, edited 1 time in total.
mo meng, mo ching (which loosely means: no money, no life)
Michigander, once you submit an IFT you have until noon to change your mind. Example, on Apr 27 you submit IFT at 9 am, when it passes noon time you cannot change it. If you submit it 27 Apr at 2 pm then it will not take place as of the 27 Apr closing prices but the next day which is 30 Apr
Earlrretpl, you can’t change your IFT after noon time if the days start great but sinks to the bottom later on . Just try to IFT back in at a lower price to gain the loss back at a later date.
ProduceMan wrote:Michigander, once you submit an IFT you have until noon to change your mind. Example, on Apr 27 you submit IFT at 9 am, when it passes noon time you cannot change it. If you submit it 27 Apr at 2 pm then it will not take place as of the 27 Apr closing prices but the next day which is 30 Apr
Thanks for the response. That part I understand mostly. What I'm wondering is how you can know what price you're selling or buying at in a volatile market. When i click "submit" on a IFT the fund may be +1%, but by the time the trade actually happens it might be -1%, right? Trades for IFTs don't happen at any particular time of day, do they- keeping in mind the before noon caveat?
Michigander, there’s no possible way to know before the noon deadline. Unless you have a time machine LOL. If so, can I use it next. The TSP website posts the new share prices at roughly 9 or 10 pm.
Thanks for the response and your advice to try to enter lower than when I exited.
I can tell you that I tried your 2% strategy in April. Thought about April 2nd with the big dip (dip was big before noon, so it was an "easy" pick), but saw that $50 bn additional tariffs were to be announced later in the week and hoped for another drop. On April 4 when tariffs were announced, futures were way down (S&P at 2565 or so as low point). Looked good, but after market opened, S&P continued to rise. Just before noon, figured that investors had decided that earnings will trump trade and market was making the turn up. At noon, market had recovered to about 2605 and moving up. While my original plan had not worked, figured that anything near 2600 would be pretty good. Decided to go 100% c fund (more than $1 million). S&P ended up closing at 2644. Frustrated, but ok with change as still entered market fairly low. When the bump came in Mid-April and I had my 2 percent, planned to go out on April 18, but waited due to greed. When market turned down was kicking myself and decided I would get out in the next week if there was any bump. On April 23rd, futures were up, but market lost all momentum and at noon market was around 2665. Ended up closing at around 2670. On April 24th, futures had been up even more than the day before, but once again market moved down throughout day. At noon, market at about 2665. It looked a lot like the previous day and surmised that getting out with about 1% for April would not be so bad. Market dropped sharply after lunch, closing at 2634. I ended up losing $3,200, when I could have made $25,000 if I had stuck with my 2% strategy. Ugh!
Lessons learned:
1. Don't be greedy, stick with the 2%
2. Take the dip and enter on a down day
3. For IFTs- Trend of market heading to noon is significant. Others are watching just like you. Be careful to avoid the group exit.
4. S fund has been giving bigger returns this year and I Fund is more stable- So, did a one third mix for all three funds
5. You have to be better than a professional investor to beat market due to four hour delay in your trades
On May 3rd, S&P was below 2600, the number I was looking for due to recent trends. At noon, market was at 2608 or so. Still good, so decided to go 1/3rd in C, S, and I. Ended up buying at 2629 for C. So was happy that it was a down day and lowered than what I sold in April.
Plan is to try to sell on an up day if I can project 2%. Curious if you entered market on May 3rd?
