Boghies Account Talk

[RealMoneyIssues]

Re: It Cannot Happen Here!!!

This sounds familiar



Who else has raided their government managed pension funds to fund popular projects.

Everyone since August 14th, 1935...

 

[Boghie]

Your Pension

Your Pension, Our Pension...

Unfunded is not funded...

Actually, this is not totally fair. The problem is that Federal Gubmint pensions are not allocated amongst many asset classes. They are invested in Social Security bonds. Maybe Treasuries. Anyone around here like all their eggs in a single Federal bond basket managed by 435 politicians? Bueller, Bueller??? Thus, CSRS is invested - but it is invested in one entity and one asset class. Oh well...

Ditto with the FERS pension... Yuk and double yuk.

And, even more yukky, there are Republican Goobers who want me to pay more into the Alpo Meal Deal Pension Plan. Now, to be honest, I like the safety of my Alpo Plan. It means that I don't have to invest in the 'G Fund'. I already got lots in the 'G Fund' with my FERS Pension and Social Security, eh... But, why would I force some 25 year old chump to invest in the 'G Fund'? Why do I want to force myself to buy 'G Fund' assets? Even though I am not 25 years old I do not want more of my assets going into the 'G Fund' unless I elect to buy into the 'G Fund'. So, Republican Goobers, give me this option (since you are so economic freedom loving):

1. Pour 25% of the current assets (or some percentage) of my FERS Pension into my TSP account.
2. Increase my match to 7%
3. Get out of the way
4. Bye, bye

I think this fair. You take 100% of all FERS Pension liability away from me for the cost of 25% of the paper assets you claim to hold. I think any corporation going broke because of an unfunded pension would take that offer in a second. Actually fast enough for the fastest computerized trading system to move an electron. And, folks, that is pretty fast. Gimme the Flash Pension Crash for Boghie Deal. The extra 2% in match is a significant reduction in ongoing expenditure (about a 87% reduction in current benefits paid). But, my plan gives me the right to invest those assets in something other than Gubmint stuff. And, it gets me away from the ignorant louts we routinely elect who spend our assets. I think that a win win, eh...

 

[Boghie]

TSP Allocation Change

Seems Toppy, but who knows...
Moving to a normal, moderate allocation

G: 12%
F: 22%
C: 39%
S: 15%
I: 12%

Expected Return: 5%
Expected Risk: 8%​

Took some risk off the table, but kept enough in equities to gain a bit if March is better than I think it will be...

 

[Birchtree]

Re: TSP Allocation Change

Sit down when I tell you this - our bud just took a bite of 25S. Now that is certainly progress. Now we'll see how long he can hold it.

 

[Boghie]

Re: TSP Allocation Change

Sit down when I tell you this - our bud just took a bite of 25S. Now that is certainly progress. Now we'll see how long he can hold it.

I was worried that we were hitting a market top. Get your sticky pants on!!!!

 

[Boghie]

Re: TSP Allocation Change

Gotta spend some time thinking...
Just thinking...

My three normal allocations all have some element of the 'F Fund'. Especially the Moderate and Conservative allocations. Right now I am sitting squarely in the Normal (Moderate) allocation.

But, here is the problem:

1. The assets in the 'F Fund' bubbled and seem to be correcting - albeit at a slow rate. I really don't want my 'safe' and 'stable' assets to be sitting near the top of a bubble. And, with both the market and vast parts of the economy (sorry Kalefornea, you get to watch this one) improving and normalizing I would have to assume that the FED will initiate a slow draw down of the bond buying. We might not even be informed. Who really knows if they are buying $85 Billion a month in our boat anchor Treasuries or $80 Billion. Even the Sequester may play a role. The FED will not have to pony up vapor-cash to cover the borrowing cut by the Sequester.
2. All of the Equities funds have been raging lately. They are ready for a normal swoon - a basing correction. Do I want to move some of the 'F Fund' 'safe' money to a short term bubbly 'C Fund'. Yowser.
3. Finally, who wants to squat in the 'G Fund'. Those returns get wiped out with a one day move by equities. That is not very safe. You cannot build any kind of buffer sitting in the 'G Fund' in a temporary fashion. It is really just a cash holding bin awaiting better opportunity.

Just thinking.

Kinda leaning toward a higher alpha risk play - ie. a little overbalance in the S Fund. If I'm going to be at risk I may as well give myself an opportunity for return.

 

[Boghie]

Re: TSP Allocation Change

Another thought...

Maybe overbalance the 'C Fund' is a better idea than playing with an allocation overloaded with 'S Fund' assets... That fund reinvests dividends which get you a free 2% gain on top of the S&P500 returns. Have to wonder if the 'I Fund' has a similar advantage over the EAFA???


Also, as an aside...
I just opened Quicken and checked something. I've more than doubled my holdings since 2009/01/01. Gotta love it...
Another weird thang. The chart shows that my Summer of 2011 losses were sharper than those of 2008. Never knew that...

 

[Boghie]

Well...

The EAFA fund returned 14.80% in 2012
The 'I Fund' returned 18.62%

Nice little boost there, nice boost...

WorkFE, is that your game - you sly bugger. And, I see BT livin' off that fat. You could have told the little folk!!!

 

[Boghie]

Wow, actually the marriage between the 'I Fund' and the EAFA Index is a mess.
2008
EAFA: -42.85%
I Fund: -42.43%

2009
EAFA: 23.23%
I Fund: 30.04% Wow, just wow...

2010
EAFA: 5.32%
I Fund: 7.94%

2011
EAFA: -15.62%
I Fund: -11.81%

2012
EAFA: 14.80%
I Fund: 18.62%


Is this really just the dollar? Absolute Yowser... I'm going to have to partake in some Absolute. Right Now!!!

 

[Boghie]

Folks, our funds are amazing. So far here are our YTD returns matched to their indexes:

F Fund: -0.67%
AGG: -1.02%

C Fund: +9.24%
S&P500 +6.07%

S Fund: +11.37%
VXF: + 8.34%

I Fund: + 4.32%
EAFA: + 2.84%​

Lookin' kinda dumb to be in anything other than F/C/S/I. They all overproduce their indexes.

 

[Boghie]

Re(1): '"O" the Great and Powerful', The Belmont Club, Richard Fernandez

Today’s elite has stripped civilization of all meaning except the pension and the welfare check at the end of the rainbow. That was supposed to be enough. What happens when there’s not even that?

 

[Birchtree]

Thanx for a very nice read. It says a lot.

 

[Boghie]

Re(1): "What's Money Anyhow?", The Belmont Club, Richard Fernandez

The challenge in the coming years is to unwind this deficit. The challenge is to bring the official narrative into line with the physical facts. If we won’t do it willingly then reality will do it for us. Guaranteed. Whatever the media or political or financial elite say one fact has remained unchanged since the beginning of the world. Nobody ever beat arithmetic.

For those of you shocked and dismayed by Cypress and by our ongoing financial mess may I recommend reading 'The Belmont Club'. If you think you are the smartest person in the room you should go to another room. I always find Fernandez in front of the trend. Always well worth the read. I also strongly recommend Walter Russell Mead's 'Via Media' at 'The American Interest'. Solid. If you find yourself shocked, surprised, and angry rather than prepared than find knowledge and smart folks to track on. My guess is that Talking Ed, Rachael Maddow, et. al. are probably not giving you actionable information...

For purely economic discussion you could easily do worse than:
First Trust Economics Blog
Calculated Risk
RealClearMarkets
Carpe-Diem
Calafia Beach Pundit

Happy Hunting and Stay Safe

 

[Boghie]

Flight to Safety

Running away.
Moved a whole 3% from I to G.

G: 15%
F: 22%
C: 39%
S: 15%
I: 9%

Expected Return: 5%
Expected Risk: 7%​

This is my version of panic...
Or, maybe I'm so bored I had to blow my 2nd IFT.:nuts:

Kinda guessing on the Return and Risk. My normal 'Conservative' allocation is 12/27/37/13/11 which is 5/7. But is there anything to love with Europe and Japan. Yuk... Also, don't really like holding the 'F Fund'. That thing is bubbly and only dumbies want it. But, where else to go, eh...

 

[Frixxxx]

Re: Flight to Safety

Running away.
Moved a whole 3% from I to G.

I'm waiting for Monday, I think I'll hold on for the first of the month rally. But I too will be looking to pullback. With Friday being a transaction holiday, I was doing clock math to make sure it was the right time.

 

[Boghie]

Re: Flight to Safety

Hhmmmm...

To offset the initiatives’ cost and avoid adding to deficits, Mr. Obama will propose the tobacco tax increase, a limit of $3 million on how much people can accumulate in tax-preferred savings accounts

While most of us old geezers will not have a cool $3 Mil in our retirement accounts when we first step into that motorhome a lot of the younger ones will - there being inflation and everything...

Also, $3 Mil results in $120K per year of income without taking principle from the account. Doing well, but not in the top 1%. And, is $120K today the same as $120K in forty years? Nope...

Nice long game, President.

Nice long game.

Gaming.

 

[Birchtree]

Re: Flight to Safety

If you stay with equities you have the potential for dividend increases - I've got 54 so far this year. It's like getting a cost of living increase every year. Dividend income that is regarded as qualified is taxed at 15%. A stream of income can last forever if played right.

 

[Boghie]

Re: Flight to Safety

If you stay with equities you have the potential for dividend increases - I've got 54 so far this year. It's like getting a cost of living increase every year. Dividend income that is regarded as qualified is taxed at 15%. A stream of income can last forever if played right.

Birch,

It even helps while in accumulation. Our 'C Fund' - and I think the 'I Fund' - reinvest the dividends. They both over-perform their indexes every year. I have come to the conclusion that you HAVE to have a sizable percentage of holdings in one or both of them. I'm much lighter in the 'I Fund' than I want to be, but those semi-socialist economies are running out of other peoples money to spend on their grubbers. Don't want to be between the politicians and their grubbers!!!

The over-performance is keeping me in the market. Otherwise I would have panicked. I panic a lot. Watching Amoeba for advice...

 

[Birchtree]

Re: Flight to Safety

Boghie,

If you had a choice would you prefer the $8 price of the C fund from a few years back or the current price of $19.82? Since you are still dollar cost averaging and accumulating shares - think about the new employee and their disadvantage of higher pricing.

 

[Boghie]

Re: Flight to Safety

Boghie,

If you had a choice would you prefer the $8 price of the C fund from a few years back or the current price of $19.82? Since you are still dollar cost averaging and accumulating shares - think about the new employee and their disadvantage of higher pricing.

DCA'ing at the $8 buck level (and higher) has sure helped my nest egg. I never contributed to anything other than C/S/I - and, based on your advice, I dramatically increased my contributions from mid-falling knife all the way down and all the way up. With all that DCA, I've increased my account by far more than a double since the bottom. Yummy. And those cheap shares keep on pumping out dividends and growing in value. Maybe a boat to go with the motorhome in my golden years!!!