2 fund strategy

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Scarfinger
Posts: 616
Joined: Mon Jan 30, 2012 12:00 am

2 fund strategy

Post by Scarfinger »

I am getting tired of checking my TSP everyday (honestly I probably wont stop checking). But, I want an even simpler long term strategy with rebalancing once a year instead of the 12 monthly and or 26 daily IFT's. I have been following Paul Merriman recently. I am currently using his 4 fund strategy in my Fidelity Roth IRA.

I have decided to try one of his 2 fund strategies for my TSP account.

(age - 25) x2.5 = % in your TDF. The remaining would go into small cap which I will use the "S" fund. I manually figured out the % per fund which would be close to this for me. I did some rounding to make distribution simpler.

(52 - 25) x2.5 = 67.5% (68%)

68% TDF and 32% "S" Fund

G Fund 26.60%******* 18%
F Fund 7.46%******** 05%
C Fund 33.66%******* 24%
S Fund 9.20%******** 38%
I Fund 23.08%******* 15%
I am just an average Joe. I have no clue to what the market will do.
TimboSlice wrote: "People really need to stop overthinking this."
Following Daily Seasonal # 139921 as a general guideline.

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stilljammi
Posts: 164
Joined: Sun Dec 01, 2019 3:59 pm

Re: 2 fund strategy

Post by stilljammi »

No offense, but wouldn't it be easier to just use the appropriate L fund?

Scarfinger
Posts: 616
Joined: Mon Jan 30, 2012 12:00 am

Re: 2 fund strategy

Post by Scarfinger »

I cleaned it up a little bit. For example instead of 5.88% in "F", I made it 5%. I cleaned up all the tenths of a percent so it would be easier for me to see the progress of each fund more clearly.

(because I can't stop myself from checking the funds each day)

But yes... the easiest would be to put 67.5% in the L2035 fund and 32.5 in the "S" fund and forget about it.
I am just an average Joe. I have no clue to what the market will do.
TimboSlice wrote: "People really need to stop overthinking this."
Following Daily Seasonal # 139921 as a general guideline.

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RugbyLarry
The Bearded Legend
Posts: 10
Joined: Mon Jun 15, 2020 4:32 pm

Re: 2 fund strategy

Post by RugbyLarry »

Check out book called The 3% Signal.

Simplified for TSP, it would be something like:

20-30% G, the rest in your chosen mix of CS.

Check quarterly. Rebalance when G is up or down 3% or more.

I am intrigued by this idea, and considering something like it for retirement.

ProduceMan
Posts: 507
Joined: Thu Jan 18, 2018 12:01 pm

Re: 2 fund strategy

Post by ProduceMan »

Scarfinger wrote: Sat Apr 10, 2021 6:45 pm I am getting tired of checking my TSP everyday (honestly I probably wont stop checking).

(52 - 25) x2.5 = 67.5% (68%)

68% TDF and 32% "S" Fund

G Fund 26.60%******* 18%
F Fund 7.46%******** 05%
C Fund 33.66%******* 24%
S Fund 9.20%******** 38%
I Fund 23.08%******* 15%
So what’s your plan?

Do you -

1 - Set it and forget it

2 - Rebalance monthly, quarterly, semi-annually, yearly, and or a predetermined %
Moneys’ Money Making Money (4M)

Scarfinger
Posts: 616
Joined: Mon Jan 30, 2012 12:00 am

Re: 2 fund strategy

Post by Scarfinger »

It would be rebalanced yearly.

I am trying to find a system that “glides” me more towards retirement but should do better than a traditional “target date fund”.

I believe this 2 fund strategy will be one that I can work with and progress me to a 50% G/F and 50% equities by retirement.
I am just an average Joe. I have no clue to what the market will do.
TimboSlice wrote: "People really need to stop overthinking this."
Following Daily Seasonal # 139921 as a general guideline.

Bubba
Posts: 169
Joined: Thu Mar 05, 2020 3:40 am

Re: 2 fund strategy

Post by Bubba »

Scarfinger wrote: Sat Apr 10, 2021 6:45 pm I am getting tired of checking my TSP everyday (honestly I probably wont stop checking). But, I want an even simpler long term strategy with rebalancing once a year instead of the 12 monthly and or 26 daily IFT's. I have been following Paul Merriman recently. I am currently using his 4 fund strategy in my Fidelity Roth IRA.

I have decided to try one of his 2 fund strategies for my TSP account.

(age - 25) x2.5 = % in your TDF. The remaining would go into small cap which I will use the "S" fund. I manually figured out the % per fund which would be close to this for me. I did some rounding to make distribution simpler.

(52 - 25) x2.5 = 67.5% (68%)

68% TDF and 32% "S" Fund

G Fund 26.60%******* 18%
F Fund 7.46%******** 05%
C Fund 33.66%******* 24%
S Fund 9.20%******** 38%
I Fund 23.08%******* 15%
I'm a HUGE Merriman fan...but I would caution you, his work doesn't lend itself directly to our situation. The S Fund is a mid and small cap blend stock fund. At times, it's more mid than small cap. Merriman uses value (small and large) to capture tons of gains. We cannot (as of yet) do that with the TSP. Our blend funds provide some good returns, but not "value" returns.

You have other options, if you want to keep it KISS.

An example would be to go Nov to Apr in the S Fund and the rest of the year in the C Fund (with the exception of August, which would be either G or F). You could add more complexity like going March and mid April to the I and December to the I as well. That way you don't worry too much.

I get your point, I'm also a bit exhausted about the daily movements. I also have a few "leveraged" movements that I do (last year was over 500%!), but that has me moving even more than the TSP. The movements there and the TSP have me making mistakes at times. I really hate the mistakes.

I've contacted M1 Finance and asked them to create a program within M1 that would allow us to program the whole year in advance. Their software should lend itself to that really nicely. Maybe more would do the same, at which point they would see the interest and would take it seriously. Imagine spending 1 or 2 hours in January, planning out all your moves for the year and then just walk away from the whole shabang. Then, you check in the following January again without having lifted a finger. One can only dream...

Scarfinger
Posts: 616
Joined: Mon Jan 30, 2012 12:00 am

Re: 2 fund strategy

Post by Scarfinger »

Thanks for the input Bubba. I appreciate it.
I am just an average Joe. I have no clue to what the market will do.
TimboSlice wrote: "People really need to stop overthinking this."
Following Daily Seasonal # 139921 as a general guideline.

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Fund Prices2021-05-07

FundPriceDayYTD
G $16.58 0.00% 0.43%
F $20.72 0.00% -2.27%
C $63.32 0.75% 13.24%
S $82.16 1.32% 10.72%
I $38.76 1.29% 9.51%
L2065 $13.84 1.02% 11.49%
L2060 $13.84 1.02% 11.49%
L2055 $13.84 1.02% 11.49%
L2050 $28.21 0.84% 9.30%
L2045 $12.88 0.79% 8.73%
L2040 $47.05 0.73% 8.19%
L2035 $12.44 0.67% 7.54%
L2030 $41.46 0.61% 6.91%
L2025 $11.77 0.48% 5.47%
Linc $22.89 0.23% 2.76%

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".

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"Don't ever half-ass two things. Whole-ass one thing."
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