Additional Funds

[NeoAtriedes]

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Hi all;
I've been sending comments now and then for the past couple of years to TSP about adding 2 additional funds. These funds would diversify and offer more real choices. I've been a proponent of a real estate fund and a commodities fund. Both funds would be baskets of course but only in the real estate and commodities area.
Does this sound like a goood idea? If not why not. Consider what could have been during the last 2 years. If you think it is a good idea please send comments to TSP. They need to get the message,
Thanks

 

[tsptalk]

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Welcome Neo -
I think TSP should have spent their energy coming up with new funds rather then the L-funds. Most people could figure outhow to diversify the 5 funds we already had. What we needed were more choices. REIT, Tech (semis), Health care, financial, commodities, utilities, whatever.

Tom

 

[Sr]

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What we needed were more choices. REIT, Tech (semis), Health care, financial, commodities, utilities, whatever. --Tom

:: well, that is what puzzles me with this TA stuff with s&P and moving between stocks and cash. If we don't play on the short side of the market, if we do not read the oil, commodities, REIT's, bond and goldfundsand miss the bull market in these, how do you explain this TSP site? One hand tied behind the back, looking at the rear view mirror, disregarding half the global market, moving between S and C funds with occasional forray in to I funds? I kno, I know to each his own .....but this is learning web page too. Is it not? What else can we do with the TSP money?

 

[tsptalk]

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I guess I don't understand the question. Are you saying we don't have enough choices to make a difference in our account?

The difference in the return of each fund seems to make a big difference which fund(s) you pick.

Total 1988-2004

G+197.55%
F +253.64%
C +591.99%
S +607.24%
I +159.38%

 

[Birchtree]

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Sr,

You are starting to sound like Johnny Depp cry baby. Dry your eyes and listen to this salty dog. The TSP is a deferred compensation program designed to help employees save some money for retirement and reduce their AGI at the same time to reduce their tax burden. It is strictly a voluntary program - with a 5% match as an incentive to encourage folks to save. You will only achieve investor paradise on TSPtalk when you have saved and worked many years to accumulate a power account.

Now once you have done your time in grade and have earned a righteous power account - then you will come to understand the value that TSPtalk has to offer you. When you have achieved the ability to use $400,000 to help you make even more money faster, then you should be educated enough in investing not to micturate it away. Members of TSPtalk offer their insights to help themselves and others to make more money. Remember, the first law of finance is that it takes money to make money.

We all have opinions- and some times those opinions are like arm pits - we may have two. There are just so many variables that it is difficult to grasp the big picture. Any help I can get is appreciated- I've worked alone too many years and it is hard work trying to keep ahead with a power account. Let me demonstrate how a power account works, and by the way, the new generation in the pipline starting in 2006 can put in $15,000/year not including the $5000 over fifty catchup - it won't take long to hit $400,000. With that much money working a $.15 gain in a fund=let's see,$400,000/13.15 C fund=30,418 shares, that's about right. 30,418x.15=4562 dollars. 30,418x.50=15209 dollars. You can pistol shoot with impunity and there are no commission fees, like in outside accounts. You just have to know what you are shooting at and know the rules of play. You have to be aware of economics, politics, liars, momentum players, head fakes, bear traps, bull traps, sentiment indicators of many types - learn and learn some more. My power account will grow to double its current size before I face RMD - required minimum distribution. And last but not least we expect to have fun with our frustrations and sharing any sucesses we have.

Dennis-perma bull # 2

 

[Spaf]

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Go Dennis :^ [Us bulls gotta protect ourselves!!!!]

 

[Birchtree]

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Sr,

I forgot to mention that the percent gain for the C fund could have been much higher if a TSPtalk participant was prescient enough to avoid the years 2000, 2001, and 2002. Unfortunately, I think TSPtalk has only been around for a few years - but another cycle is on the way and more folks will be in the loop to avoid down side bear markets. Tom posted a gain of +591 for the C fund. Here is more data:

1995 = +37.41%, 1996 = +22.85%, 1997 = +33.17%, 1998 = +28.44%, 1999 = +20.95%. Getting out at the top of sp500 at 1527.46 would have saved both grief and money. A smart investor would have left the C fundcontribution intact at 100% and dollar cost averaged the entire way down, buying on the cheap and cheaper. The sp500 bottomed in October 2002 around 790 on the index and has since rallied back to present day level of 1219.71. One heck of a sweet round trip - painful as it may have been - you have to know when to get back in - that's the hard part, but while waiting auto-pilot is engaged. The down were: 2000 = -9.14%, 2001 = -11.94%, 2002 = -22.05%. 2003 was a good year like 1995.

Dennis

 

[Sr]

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Thank you all for making this "game"more clear. Guess, as you say, have to have the money to make money. I was hoping some of you would encourage investing outside the TSPin other asset classes as well. Well, thatwill bemy poison to figure out. Didn't mean to rain on any one's parade here at all and Iam learning something useful here.

 

[rokid]

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I'd like to see REITS and Emerging Markets added to the TSP mix. Although we're exposed to REITS in the C & S Funds, overweighting REITS in a portfolio could be useful. In addition, although Emerging Markets are 7% of the world'sstocks,the IFund doesn't include them.Emerging Marketsare veryrisky. However,YTD they're up 12.9% and they non-correlate with the C, S, & I Funds - very nice for diversification.

 

[Show-me]

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Sr,

I just recently came to the opinion that I am going to fund my TSP 5% first for the matching funds. Then go for fully funding the Roth so that you can do some investing outside the TSP. Live and learn. I may change my mind later but that’s the plan until then.

 

[Birchtree]

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Sr,

Thanks for understanding - I personally have an outside account that is very diversified and capable of good earnings as well as capital gains. It rides with the market most of the time - though I do take opportunity to sell when the sacrifice is appropriate. I actually prefer to accumulate shares for retirement at a later date - my objective is to be in the 15% tax bracket so my dividend income and capital gains will be taxed at 5% when I'm ready to enjoy spending. Keeping oneself in the 15% bracket is the trick. I converted my wife's pension plan to a defined contribution plan so the retirement money is in our control - and will wait on TSP to eventually offer the same cash out opportunity - they are currently building a base I think to make this an attractive offer. It would definitely make short term military service more pleasing so that if one leaves early there is some money besides what is in TSP and IRA.

We will all have to become more knowledgeable in investing - artists per say- because investing is more an art than a science- that's why it is such an open opportunity to all. Actually, sometimes the less one knows the easier it is to be an investor - but the more money on the table the more education required for hedging.