Benchmarks and realistic expectations

[Scarfinger]

I sometimes get the FOMO and recency bias and was doing some reading and thinking about my expectations.

I came to the conclusion that a better benchmark for myself would be the appropriate target date fund. For me that is the L2035. Considering that the closer to retirement I get, I need to pull back from a 100% stock ratio.

What is your benchmark?

[mjedlin66]

I use 50/50 C/S as a benchmark.

I am not doing well by this metric.

[romiwr]

Agreed.

[Commando303]

I sometimes get the FOMO and recency bias and was doing some reading and thinking about my expectations.

I came to the conclusion that a better benchmark for myself would be the appropriate target date fund. For me that is the L2035. Considering that the closer to retirement I get, I need to pull back from a 100% stock ratio.

What is your benchmark?

I think that using a benchmark certainly is important; however, I am not quite certain what you are comparing against this benchmark...

[Aitrus]

I think that using a benchmark certainly is important; however, I am not quite certain what you are comparing against this benchmark...

Welcome to the forum, Commando. Glad you're here.

I think he's comparing his personal TSP account's performance against a benchmark he's aiming to either equal or beat.

[Scarfinger]

I think that using a benchmark certainly is important; however, I am not quite certain what you are comparing against this benchmark...

Welcome to the forum, Commando. Glad you're here.

I think he's comparing his personal TSP account's performance against a benchmark he's aiming to either equal or beat.

Correct Aitrus.

I have been looking at the top performers that are 15%+ which are mainly 100% stocks. For me as I get closer to retirement I need to pull back from the 100% stocks and add more safety. So I was thinking that an Lfund would be a better benchmark for my personal TSP vs the top performers on this website.

I was just suggesting that as an individual you don't have to use the top performers as a benchmark. There may be a more appropriate benchmark. This may help subdue the FOMO and recency bias I was feeling and maybe a few other members are feeling.

[Blue_Radio]

I have been looking at the top performers that are 15%+ which are mainly 100% stocks. For me as I get closer to retirement I need to pull back from the 100% stocks and add more safety. So I was thinking that an Lfund would be a better benchmark for my personal TSP vs the top performers on this website.

This is me right now. I’ve dialed back the risk in accounts jointly held with my spouse, which is not easy to do because of the FOMO! But my TSP and a personal IRA are, respectively, in the C Fund and an aggressive mutual fund. Nevertheless, I'll evolve them to less risky allocations as I get closer to required minimum distributions.

I was just suggesting that as an individual you don't have to use the top performers as a benchmark. There may be a more appropriate benchmark. This may help subdue the FOMO and recency bias I was feeling and maybe a few other members are feeling.

Benchmarks? My personal favorite is the S&P 500 to get a general sense of what’s happened (back-testing) or what’s going on at the moment, but indexes don’t behave like mutual funds. So I like to use well-known good performers when considering allocations comprised of multiple TSP funds. Examples: The Fidelity 500 (FXAIX) for stocks, the Vanguard Total Bond Market Index Fund (BND), PIMCO Income Fund (PIMX) for growth and income, etc.