Hello
I posted Robo-Advisers Leading Their Herds to the Slaughter just like the TSP Lifecycle funds on my blog in case anyone is thinking of moving their TSP funds to one of these "low cost" advisers when they retire.
Cheers,
About those Robo-advisers
Moderator: Aitrus
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ProduceMan
- Posts: 573
- Joined: Thu Jan 18, 2018 12:01 pm
Re: About those Robo-advisers
Your argument is the same debate people have about ETFs. Surprisingly, people in the late 80s blamed the flash crash on the same principle. While I agree that there are risks with ETFs, I'm not convinced that people use ETFs as stocks and more like mutual funds.TSPsmart wrote:Hello
I posted Robo-Advisers Leading Their Herds to the Slaughter just like the TSP Lifecycle funds on my blog in case anyone is thinking of moving their TSP funds to one of these "low cost" advisers when they retire.
Cheers,
Re: About those Robo-advisers
Because the L funds deserve our hate. It deserves our greatest seething hate we can muster from the blackest depths of our minds.ProduceMan wrote:Why you hating on the L Funds
The L funds are complete garbage. The principal issue with them is the "...L Funds are rebalanced to their target allocations each business day."
https://www.tsp.gov/PDF/formspubs/FundsL.pdf
The thing about diversification of funds is the ability to rebalance after a certain amount of time. For example, the classic 60/40 split for stocks and bonds has proven to be effective and the best time for rebalancing funds is quarterly. Studies have shown that there is very little difference in performance between rebalancing monthly, quarterly, and semi-annually. The worst performance is daily.
With the L funds rebalancing daily, you are throwing money daily at the falling market when it's going down. Conversely if you merely did it monthly, quarterly, or semi-annually you are letting it drop further to buy more.
Worse, is when it's going up, you are continually taking money off the table, so you are not allowing as much cash for compounding.
Rebalancing daily has been proven to be the literally the worst thing you can do.
Even the Robo-advisors like WiseBanyan "rebalance your portfolio if any portion strays by more than 5% from the target allocation."
The only reason to rebalance daily is to be able to charge more fees.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar
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ProduceMan
- Posts: 573
- Joined: Thu Jan 18, 2018 12:01 pm
Re: About those Robo-advisers
Yeah I read the PDF under the forms and publications/Lfunds PDF page. That’s crazy, rebalanced daily. Wow! My understanding is that all L funds are rebalanced daily then all but the Inc funds investment mixes adjusted quarterly
Moneys’ Money Making Money (4M)
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ProduceMan
- Posts: 573
- Joined: Thu Jan 18, 2018 12:01 pm
Re: About those Robo-advisers
ArrieS, I’ve gotten pretty good returns from the L Funds particularly the 50. Maybe due to the Bull season. IMHO the shares from the L Funds are just the shares value as a whole. With that being said, I’m not purchasing the individual funds it represents. IMHO
Moneys’ Money Making Money (4M)
Re: About those Robo-advisers
Of course, it's pretty easy to capture the good of the L funds while ignoring the bad. Just pick the L fund that you like, allocate your funds and your contributions IAW the pie chart for that fund, and then adjust at the next quarter to match that fund's new allocation. Then go away and don't touch it in between quarters! 
Re: About those Robo-advisers
Are there any charts/numbers that show the difference between daily/quarterly/yearly?ArrieS wrote:Because the L funds deserve our hate. It deserves our greatest seething hate we can muster from the blackest depths of our minds.ProduceMan wrote:Why you hating on the L Funds
The L funds are complete garbage. The principal issue with them is the "...L Funds are rebalanced to their target allocations each business day."
https://www.tsp.gov/PDF/formspubs/FundsL.pdf
The thing about diversification of funds is the ability to rebalance after a certain amount of time. For example, the classic 60/40 split for stocks and bonds has proven to be effective and the best time for rebalancing funds is quarterly. Studies have shown that there is very little difference in performance between rebalancing monthly, quarterly, and semi-annually. The worst performance is daily.
With the L funds rebalancing daily, you are throwing money daily at the falling market when it's going down. Conversely if you merely did it monthly, quarterly, or semi-annually you are letting it drop further to buy more.
Worse, is when it's going up, you are continually taking money off the table, so you are not allowing as much cash for compounding.
Rebalancing daily has been proven to be the literally the worst thing you can do.
Even the Robo-advisors like WiseBanyan "rebalance your portfolio if any portion strays by more than 5% from the target allocation."
The only reason to rebalance daily is to be able to charge more fees.
2019: Ignore everything that Mr. Imperfect says. Just roll the dice, will probably do better.
2020: Did Mr. Imperfect hack my fantasy account?
2021: My fantasy account got COVID.
2020: Did Mr. Imperfect hack my fantasy account?
2021: My fantasy account got COVID.
Fund Prices2024-04-18
| Fund | Price | Day | YTD |
| G | $18.19 | 0.01% | 1.27% |
| F | $18.62 | -0.30% | -3.14% |
| C | $78.45 | -0.21% | 5.50% |
| S | $76.12 | -0.20% | -1.27% |
| I | $40.67 | 0.02% | 1.21% |
| L2065 | $15.58 | -0.13% | 3.04% |
| L2060 | $15.58 | -0.13% | 3.04% |
| L2055 | $15.58 | -0.13% | 3.04% |
| L2050 | $31.35 | -0.13% | 2.44% |
| L2045 | $14.32 | -0.12% | 2.35% |
| L2040 | $52.37 | -0.11% | 2.29% |
| L2035 | $13.85 | -0.10% | 2.21% |
| L2030 | $46.21 | -0.09% | 2.15% |
| L2025 | $12.93 | -0.05% | 1.72% |
| Linc | $25.28 | -0.04% | 1.51% |