Best Year Yet.

[rcevans]

aev, not knowing your particulars I will say if your pension is involved and has yet to be divided make sure you word your COAP correctly for OPM has made policy changes on the RAS, RAS was not included and they made a policy change to include it autiomatically now. I just had to get mine back and went through the courts to do it but saved me about $48k over the next 8-9 years.

Thank you Regular Guy

Yes, I plan on sticking to it as much as I can through the summer. Sure, there may be some 4-5% months in there were I only got 2% but that's back to were I think about my annual percentage and feel I am not missing anything.

Sure thing on the Steaks and beer, No houseboat though, we are wakeboarders. Still trying to defy the aging process. And yes, getting past the 'greed' feeling is big or the feeling of sitting in the C fund when damn I wish I was in the 'S' or look how good the 'I' just did........

My trigger to buy back in is... for starters, I can't, which for rcozby's question the answer is that as I watch today I guess I am fortunate to be on the sidelines with my hands tied. So in the meantime I just watch, knowing that whatever stupid tweet goes out or missiles launched I can do nothing, but still making some 'out to dinner money' everyday in the G fund is ok. But I am watching the S&P waves, as the month comes to a close I will print out the C Fund, look for the highs and lows, highlight my up days and see if it's got any consistent 3 or 4 up days in a row or it's been a constant one up one down and then wait for May to come around. Personally I did not get on a computer until after lunch today so if today had happened after May 1, yes, I would have missed a chance to get back in but I would have watched the next day very closely and a pretty much flat to slightly down I would probably go back in and if it had been a second monster drop in a row, for sure. Not sure if that answers your question but it's the best I can explain.

One thing that has crossed my mind that I do not have an answer to is.... I was wondering if there are alot of other retirement programs based on a limited number of trades/month and they too are on the calendar month and they too have thier employees or investors all traded out just waiting for the first to roll around again looking for an oppurtunity?

[ewok55]

I have always got 2%.

Thanks for the thread! Two quick questions:

1) How long is "always?" (have you been using this method since January 2018? January 1998?)

2) What's your "lower cap?" That is, you have an upper cap of 2% when you decide to IFT out ... Do you also have a lower cap where you pull it out? Like if it goes down 20% after you buy, do you leave it in there still hoping to get a net of +2%?

[rcevans]

I guess I meant to say that I have always got 2% since I started applying this way of thinking as we entered this sideways market. One month... great, two months...lucky?, three months...coincidence?, four months...??? I thought about it last year but it did not make sense in a market that just kept going up with no correction and I believe a couple months last year like August or October things were even kind of flat for awhile.
Prior to that, I was mostly a buy and hold person. I entered into it in 1989 and mostly rode aggressive all through. Even stayed in all the way from 2007 until 2013 with the feeling that I still got time, or retirement is still a time away yet. In retirement I held 2040 most of the time. I will tell you that those last 5 years of your employment, not making withdrawals, kicking in 18.5K and balance compounding it will make you one of those TSP millionaires they talk about.
So in answer to your question, I will probably hold until it recovers back since this is gravy.

[Octjan2]

I understand you have been lucky this year and timed it correctly, which allowed you to get some gains. I congratulate you for your success. However, don’t count on that strategy working long term. I have over 21 years with TSP and that strategy doesn’t work long term. You can’t time the market. The market has a way of making you feel like a genius when you are lucky and like a blooming idiot when wrong. As you stated, you were out of interfund transfers, which saved you from missing most of the losses in February. By trying to time the market you won’t average 2% a month. Been there and done that. Just as an example, Ray Dalio, who oversees billions in his companies investments, said in late January that “ you are going to feel really stupid if you are sitting in cash this year” has to feel like an idiot. If he can’t predict what happened, with all the chart analyst and highly paid traders working for him, what makes you think you can, especially when you have to make 1 of your 2 monthly transfers before noon. Don’t be surprised if this market doesn’t storm back just because everybody is doom and gloom right now.

[Aitrus]

rcevans,

Thanks for sharing how you do what you do. That's what makes this site such a pleasure: folks like yourself sharing your wisdom and experiences for the rest of us to read, digest, and grow in our understanding of this whole investment thingy.

I'll say this from what I've read in your posts: it sounds like your system works well for you. If you like the results - especially in retirement - then by all means keep on keeping on with it! You've got other things to worry about. You're inundated with critical decisions such as "which pair of flip-flops do I want to wear to the beach today" or similar levels of world-ending seriousness, am I right?

[bamafamily]

OctJan2.....
I have a quick question.....I see that you subscribe to the theory that timing does not work.
I believe that everything usually falls into the "timing" or "buy and hold" category. Using different TA indicators, or Seasonal strategy is essentially timing the market.
Can I assume that you are more of a Buy and Hold type investor???

thx
Bama

I understand you have been lucky this year and timed it correctly, which allowed you to get some gains. I congratulate you for your success. However, don’t count on that strategy working long term. I have over 21 years with TSP and that strategy doesn’t work long term. You can’t time the market. .......................

[rcevans]

OctJan2...,
The jest of my article was not just about timing and I cannot agree with you more on most things. I was always a buy and hold guy, especially while I was still working and putting in bi-weekly contributions. My post was mostly about being happy with the simplest 1-2% gains per month that can equal that 12-24%/year which in retirement is very satisfying. And instead of always trying to go for more or maximum and worrying about missing something, even the smallest gains can be rewarding in what they are calling this "sideways market".

[crondanet5]

I see your pattern worked well so far this year. With the 2 IFT rule you would miss the first day of the month market gain due to brokerage houses applying 401k contributions to their member accounts, but the first half of the month investing you do has worked well. We'll see if it works in May. Thanks for the post. You have 5 Reputation Points.

[michigande]

I definitely like the concept, but I'm not fully understanding how it is implemented. When an IFT request is submitted on the TSP website it doesn't instantaneously sell and purchase, right? You might submit the request when you're up and by the time its enacted it could be down, or am I misunderstanding IFTs?

Thanks for the post and sharing your experience!

[Octjan2]

OctJan2.....
I have a quick question.....I see that you subscribe to the theory that timing does not work.
I believe that everything usually falls into the "timing" or "buy and hold" category. Using different TA indicators, or Seasonal strategy is essentially timing the market.
Can I assume that you are more of a Buy and Hold type investor???

thx
Bama

I understand you have been lucky this year and timed it correctly, which allowed you to get some gains. I congratulate you for your success. However, don’t count on that strategy working long term. I have over 21 years with TSP and that strategy doesn’t work long term. You can’t time the market. .......................

No, I am not a buy and hold strategist. I was simply stating that you will not maintain 2% gains per month trying to time the market in the TSP. Maybe as a day trader but not in the TSP. The TSP was designed for mostly buy and hold long term investing strategies. If you are doing 2 IFT's per month you will win some and lose some....but I haven't seen anyone average 24% per year doing it. I'm still trying to follow the daily seasonals on TSP Calc....but losing each month this year is getting old.

[nodak]

rcevans,

I wish you continued success but be careful. Your thread reminded me of an old post:

http://tspcenter.com/forums/viewtopic.php?f=14&t=10472


It started out as a question about maxing your contributions but quickly turned into a heated debate about his decision to use 12% yearly return in his calculations. The OP “knew” that he could easily get 1% return a month. Long story short, he failed miserably and was never heard from again. The year following his post he lost 3% and C Fund was up about 7%.

Best of luck but use caution.

[mindofmush]

rcevans,

I wish you continued success but be careful. Your thread reminded me of an old post:

http://tspcenter.com/forums/viewtopic.php?f=14&t=10472

It started out as a question about maxing your contributions but quickly turned into a heated debate about his decision to use 12% yearly return in his calculations. The OP “knew” that he could easily get 1% return a month. Long story short, he failed miserably and was never heard from again. The year following his post he lost 3% and C Fund was up about 7%.

The year following his post was 2015 where cfichera lost 6.91% and the C fund was up 1.46% (the G fund out performed all others with 2.05% that year). (6.91% came from cfichera's fantasy account and the 1.46% came from TSPcalc.com)

TSPcalc.com shows C fund CAGR 8.73% over the last 13 years and the Motley Fool shows 11% return on S&P 500 index fund over the last 30 years for a totally passive strategy to attain 8-11% returns which includes riding out the market drops of 1990,2001 and 2008. Any active measures to avoid the dips and buys into lows as the market climbs out of the corrections would increase average returns to greater than 12% annually. The TSP greatly complicates the timing of any responses to the market with it's 2 day delay with IFTs, so yes, the TSP makes it difficult to achieve greater than the buy&hold forever strategy.

I think cfichera missed the greatest advantage of limiting his contributions to only 5% to get the matching because he wanted to spend the rest on fun while he's young. Dave Ramsey recommends contributing 15% of your salary to retirement (after debt is paid off). If cfichera contributed at least another 10% to an outside brokerage account, he could have easily achieved the 12-15% overall return he was looking for.

[nodak]

rcevans,

I wish you continued success but be careful. Your thread reminded me of an old post:

http://tspcenter.com/forums/viewtopic.php?f=14&t=10472

It started out as a question about maxing your contributions but quickly turned into a heated debate about his decision to use 12% yearly return in his calculations. The OP “knew” that he could easily get 1% return a month. Long story short, he failed miserably and was never heard from again. The year following his post he lost 3% and C Fund was up about 7%.

The year following his post was 2015 where cfichera lost 6.91% and the C fund was up 1.46% (the G fund out performed all others with 2.05% that year). (6.91% came from cfichera's fantasy account and the 1.46% came from TSPcalc.com)

TSPcalc.com shows C fund CAGR 8.73% over the last 13 years and the Motley Fool shows 11% return on S&P 500 index fund over the last 30 years for a totally passive strategy to attain 8-11% returns which includes riding out the market drops of 1990,2001 and 2008. Any active measures to avoid the dips and buys into lows as the market climbs out of the corrections would increase average returns to greater than 12% annually. The TSP greatly complicates the timing of any responses to the market with it's 2 day delay with IFTs, so yes, the TSP makes it difficult to achieve greater than the buy&hold forever strategy.

I think cfichera missed the greatest advantage of limiting his contributions to only 5% to get the matching because he wanted to spend the rest on fun while he's young. Dave Ramsey recommends contributing 15% of your salary to retirement (after debt is paid off). If cfichera contributed at least another 10% to an outside brokerage account, he could have easily achieved the 12-15% overall return he was looking for.

1.) The return I used for “The year following” was the 12 months following his post; July 2014 thru July 2015. Not sure why I would ignore the first 5 months just to start at the beginning of a new year. Irrelevant, he failed either way.

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? And just to be clear, cfichera was talking about 1% per month, to guarantee 12% per year, not 12% average over time.

3.) I agree – limiting his contributions to 5% was a huge mistake. But how would increasing his contributions change his performance? If he lost 6.91% in 2015, that percentage doesn’t change whether he invested $10 or $10,000. Unless you are suggesting that he would somehow become a better investor/timer if he was in an “outside brokerage account”.

[Earlyretpl]

How do you avoid the wild point swing days that start great but market falls like a rock after noon when you have locked in an IFT?

[crondanet5]

He is out by the middle of the month.