Absolute beginner who put everything into G

I've put 100% into the L 2040. Watching the S&P, it's been on an upward trend, so definitely no -10% correction there. Do I wait for a correction before buying 2050 because each share will be cheaper, and thus I'll be able to get more shares that equals profit when the market improves?
 
You are forgetting that the C fund is a proxy for the S&P 500 - which means you would be diversified into 500 of the largest U.S. companies. At some point you'll recognize that pain is beneficial and should be welcomed - but it is your money.
 
Birchtree said:
Simplify your life and go 100% C fund and lock the door behind you - we are in a mega trend secular bull market that may last for decades. You should concentrate on building a base in a Roth IRA for yourself and the wife. A Roth IRA will allow plenty of flexibility - buy dividend stocks and reinvest that income for the next 30 years. Investing is not difficult but does require discipline - don't pay attention to the daily noise and sleep well while you educate yourself - it just takes time in grade.
Click to expand...

The idea of putting all my eggs into one basket scares me. Perhaps for the more well-informed or risk-seekers, that might sound enticing, but for this newbie whose idea of retirement was my dinky little savings account added onto my 5% G-funded TSP, I like the diversification (if not completely ideal) that the L funds offer to me. Maybe when I educate myself more, I'll be more adventurous, but I'll take Boghie's earlier advice and dump my funds into the L 2040 fund. I'll watch the markets and wait for a correction of 10% or more, and if that happens, I'll dump all my funds and future allocations to the L 2050 fund.

I figured that while not ideal, it's a good place to start RIGHT NOW while I explore the forums, consider expert financial planning, and whatnot. Might as well put it somewhere that's more effective than G.
 
Simplify your life and go 100% C fund and lock the door behind you - we are in a mega trend secular bull market that may last for decades. You should concentrate on building a base in a Roth IRA for yourself and the wife. A Roth IRA will allow plenty of flexibility - buy dividend stocks and reinvest that income for the next 30 years. Investing is not difficult but does require discipline - don't pay attention to the daily noise and sleep well while you educate yourself - it just takes time in grade.
 
Hello,

While I am a Newbie myself but I said consider yourself very lucky to have your stockpile in G fund. In 2008-2011 there is market crash and flash crash so you have save yourself a fortune by being "safe" fast forward to today I recommend you follow one of the investment guru. For $200 a year, you save yourself a lot of stress dealing with investing, another option is to follow the big tracker Tom had created, the people in the top 50's obviously know what they are doing to make some massive gain. Good luck and have fun :)
 
aznxk3vi17 said:
....I have no idea what people mean by "correction" in relation to the S&P 500. I've literally never paid any attention to the stock market up until this point, but now that it's actually relevant, I'd like to know a bit more... a good starting point.
Click to expand...

A "correction" is a drop in price of a stock, index or overall market. Term is a bit loosely defined but some say a small correction or adjustment is a few percent, but most think a true correction is a 10% or more drop. Once a drop gets beyond 20% it is thought the market could be changing its overall "trend" and moving from a "bull" to bear" market that could last for months or years bringing on lower and lower prices. Right now we are in a bull market but many believe it us reaching a peak (inflated) while other believe it will go on for a few more years.
 
correction

Some more light reading:

http://onswipe.investopedia.com/investopedia/#!/entry/,522bf652da27f5d9d01bd2a5

Essentially, the L2040 is less weighted to the S-Fund (S&P 500). If a correction were to occur, a jump to the L2050 could prove profitable.
 
Everybody, thank you so much... I know how tedious and annoying it could be explaining these things to somebody who has absolutely no knowledge on the subject, but I sincerely appreciate your advice.

So, basically I've gone ahead and scheduled a 100% allocation to my L 2050 fund, and at the same time, it sounds like I should do a 100% interfund transfer from my G to my L 2050 fund.

Is this a decent starting point? I have no idea what people mean by "correction" in relation to the S&P 500. I've literally never paid any attention to the stock market up until this point, but now that it's actually relevant, I'd like to know a bit more... a good starting point.
 
L Funds

It might help if you see the breakdown of the L Funds.

https://www.tsp.gov/PDF/formspubs/LFunds.pdf
 
Agree. Stay away from G and F. Not much there...look at returns historically for each fund type going back as far as you can. Definitely keep in the market and spread it out..heavily sit in S fund. Have your contributions spread the same way so you are dollar averaging over the years...buying at both high and lows.

Best advice I ever got was to put it all in market when I first started, leave it alone, put as much money as you can into it, use your yearly colas as opportunity time to increase you contribution percentage so you don't feel it because you just forgo the increase. In hindsight, my only regret is that I only put about 70 to 90% in the market.

Don't look at my returns this year...I abandoned the old great advice, stayed out of market for most of this awesome year, and trying to learn how to time market...will see how long I last..low returns are killing me and am only partly invested..which also has a definite effect (no return for money sitting in G)
 
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skycophigh said:
Boghie, great advise, where were u 30 years ago????? anyway, ive chased my tail for 30 years in tsp, made so many wrong moves that i cant see straight. lost more money than ive won methinks.... now, im retired, cant afford to lose any in the tsp. what might u think would be a good, conservative approach for investing within the tsp??? or should i roll it out it to something easier to move around???
Click to expand...

Thirty years ago... I was driving my scary friends to concerts and parties:p

Twenty five years ago I was not investing in my retirement at all. Just the 1% auto invest to the 'G Fund'.:o

Twenty years ago I watched a potential large pay raise become an income drop because of the Clinton Tax Code:(. That woke me up.


I know this guy got into a stupid scrape, but I think the 'Buckets of Money' approach is the best strategy for those in retirement. His son runs the financial advise company now, but follows the same valid strategy. Basically, 5 - 7 years of spendable assets (cash, money market, short term bonds, annuity, etc), bucket two is comprised of medium term assets (corporate bonds, REITS, etc) that can be used to largely refill bucket 1, and finally bucket three is filled with equities (15 year time horizon).

You will end up escaping from TSP. But, I think you should meet with a good financial adviser like Lucia or Ric Edelman. You do not want to be either too conservative or too risky...
 
Boghie, great advise, where were u 30 years ago????? anyway, ive chased my tail for 30 years in tsp, made so many wrong moves that i cant see straight. lost more money than ive won methinks.... now, im retired, cant afford to lose any in the tsp. what might u think would be a good, conservative approach for investing within the tsp??? or should i roll it out it to something easier to move around???







UOTE=Boghie;425304]You got it, kinda...

If it were me, I would dump 100% in the L2040 today. Watch the S&P500 for a correction. If it corrects (say -10%) move it all to the L2050 fund. If it doesn't you still have lots of equity holdings (C/S/I) that will make you mullah. That way you are 'In The Market' if things don't correct, but have some cash/bond holdings (a greater percentage of the L2040 is in G/F) that will give you a little 'alpha' if the market corrects and rebounds.

That would be a very basic 'trading' strategy to get you started.

By the way, waiting for a correction while sitting 100% in the 'G Fund' requires extensive skill or luck. What if your correction mark (let us say you believed a -20% was in the making) never happened. Well, heck, it just did. No 20% correction since March 9, 2009. You would have lost on about a 110% gain or so. You can actually see how dumb thinking like that is by looking at my AutoTracker records over the years. This year I suck because I have been waiting around with too much G/F for that elusive correction. It must be a week away:cheesy:

My advice to a 29 year old... Play the 2040 to 2050 swing till you get your feet wet. You will make bank because you will never be 'Out of the Market'. Save the bonds (F) and cash (G) for old farts like me, the smart market timers, and the dumb market timers. Make your bank early and get the captain/driver for your boat/motor home.

Oh, by the way, mixing L funds and equity funds is not a good idea. The only time I have done that is for setting up lots of '<1%' IFT moves. All it does is add complexity. I would bet that your friend cannot even tell you what the asset allocations are after setting up the one you are talking about. If you want an all equity allocation at your age I might recommend:
G: 0% - At your age does a 2% return look like a boiling over pot of gold.
F: 0% - This pig is toppy and waiting for the FED to pull the trigger
C: 40% - Your stable fund
S: 30% - Your 'alpha' fund
I: 30% - Seen our Congress/President lately

Average Annual Return: 7% after inflation
Average Annual Risk: 11%
​

Thus, one could expect a normal return (67% of the time) to be from -4% through +18%[/QUOTE]
 
aznxk3vi17 said:
From what I gather, since I know nothing at this point, but should also take action right now, I'll watch the S&P and if things look good, start moving it immediately into my L 2050 fund. Since I'm young and willing to take some risks, but not completely knowledgeable, how does a 75% L 2050, 10% C, 10% S, and 5% I allocation sound? Or, should I just go all in to my L fund?
Click to expand...

You got it, kinda...

If it were me, I would dump 100% in the L2040 today. Watch the S&P500 for a correction. If it corrects (say -10%) move it all to the L2050 fund. If it doesn't you still have lots of equity holdings (C/S/I) that will make you mullah. That way you are 'In The Market' if things don't correct, but have some cash/bond holdings (a greater percentage of the L2040 is in G/F) that will give you a little 'alpha' if the market corrects and rebounds.

That would be a very basic 'trading' strategy to get you started.

By the way, waiting for a correction while sitting 100% in the 'G Fund' requires extensive skill or luck. What if your correction mark (let us say you believed a -20% was in the making) never happened. Well, heck, it just did. No 20% correction since March 9, 2009. You would have lost on about a 110% gain or so. You can actually see how dumb thinking like that is by looking at my AutoTracker records over the years. This year I suck because I have been waiting around with too much G/F for that elusive correction. It must be a week away:cheesy:

My advice to a 29 year old... Play the 2040 to 2050 swing till you get your feet wet. You will make bank because you will never be 'Out of the Market'. Save the bonds (F) and cash (G) for old farts like me, the smart market timers, and the dumb market timers. Make your bank early and get the captain/driver for your boat/motor home.

Oh, by the way, mixing L funds and equity funds is not a good idea. The only time I have done that is for setting up lots of '<1%' IFT moves. All it does is add complexity. I would bet that your friend cannot even tell you what the asset allocations are after setting up the one you are talking about. If you want an all equity allocation at your age I might recommend:

G: 0% - At your age does a 2% return look like a boiling over pot of gold.
F: 0% - This pig is toppy and waiting for the FED to pull the trigger
C: 40% - Your stable fund
S: 30% - Your 'alpha' fund
I: 30% - Seen our Congress/President lately

Average Annual Return: 7% after inflation
Average Annual Risk: 11%
​

Thus, one could expect a normal return (67% of the time) to be from -4% through +18%
 
From what I gather, since I know nothing at this point, but should also take action right now, I'll watch the S&P and if things look good, start moving it immediately into my L 2050 fund. Since I'm young and willing to take some risks, but not completely knowledgeable, how does a 75% L 2050, 10% C, 10% S, and 5% I allocation sound? Or, should I just go all in to my L fund?
 
Hi and Welcome...

Checkout this link showing TSP returns.
https://www.tsp.gov/investmentfunds/returns/returnSummary.shtml

Also, checkout a comparison of returns for just the S and C fund shown under post 1335 at "Market Outlook" thread.

It shows that the S and C funds provide the most returns over the long term. So you can just buy and hold.. leave it completely alone to see it grow even when market turns down. Others use strategy to move monies out of those funds to the safety of G fund when the market turns down. For example, some modify their allocations very slightly---See post 2247 (9/13/13) under Mr.JohnRoss's account thread--click on attachment and read post 2248 as well. There are really so many investment strategies. You would need to choose how much time you can invest in managing your account to decide what is the best strategy, plus taking into consideration how much risk you are willing to take.

Overall, people with many years to retire can take higher risks as there are many years to recover from major market downturns if you are unable to avoid them.

As for when to move funds, since we are in a bull market (so far) there are many that think anytime is good especially if you are going to stay in for the long term (10+ years). Obviously if you can do a transfer during a "temporary" market downturn that would be great! Some folks believe we could see a large downturn this month but who knows????

Welcome and wish you and your family the best! :)
 
Welcome aznxk3vi17 (there mist be an explanation for that name :D )!

Buy low, sell high is the optimal, but when is the market low, and when is it high? That's the tough part.

Stick around and read some posts and you will get a feel for what's going on. Many differing opinions, but eventually a specific strategy will appeal to you, whether it's buy and hold or trading (buy low - sell high, etc.).

Good luck!
Tom
 
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