Boghies Account Talk

[Boghie]

Kinda a bad day, but then isn't everyday a bad day for the middle class.

Has anyone looked at what this years salary increase actually means. I own (actually paying a mortgage) a condo, own a 2007 Honda Civic, and still live in early modern poverty (but fixing that this weekend!!!). So, pretty middle class. Well here goes the job the gubmint does on me:

Federal Tax Bracket: 25%
State (Kalefornea) Tax Bracket: 9.3%
Social Security and Medicare (My Part): 7.5%
FERS ('Invested' in the crappy G Fund with a promise by politicians to pay): 0.7%

So, that means that taxes and unwanted 'benefits' consume 42.5% of the pay increase. Think about Social Security and FERS. Taken together, you and your employer are moving about 30% of your income to the 'G Fund' where future politicians must honor the vote buying promises of current politicians. My guess is that both benefits will be cut significantly. Imagine if you could have invested 30% of the cost of your employment in TSP. Your retirement would be amazing, eh. But, instead, look at that crappy Social Security benefit, your crappy pension, and the fact that you gotta move another 10%+ of your gross salary to a real investment in the real effort to take care of yourself in old age. How pathetic;swear

Nice, very nice. But, I can see, and I have knowledge.

I can adjust...

 

[Boghie]

Running for cover before the big draw downs hit. But, still have no crystal ball so I cannot completely bail out. Doesn't feel like 2008, more like 2011...

• G: 50% - Lousy investment, and one the Feds can grab
• F: 0% - Even lousier investment
• C: 26% - Has been running too hot recently, but...
• S: 16% - I was waiting for the S Train, running over me
• I: 8% - Eurotrash allocation

Expected Return: 4% (after inflation adjustment)
Expected Risk: 6%

Will President Obama get the blame for the upcoming recession??? Whatever is happening now will probably take some time to was out - and it ain't China...

 

[Boghie]

Sticking my head out a little bit. Moving to a reasonable facsimile of an Edelman allocation. However, I want nothing in the F and the G Fund is significantly better than cash.

• G: 40% - The G Fund returns pennies on the dollar
• F: 0% - Even lousier investment
• C: 27% - Has been running too hot recently, but...
• S: 23% - The S Train is moving
• I: 10% - What am I doing. I don't know
• Expected Return (after inflation): 4%
• Expected Risk: 8%

Since the rest of the world does not have a stable cash fund earning 1.75%, and all allocation estimators use 0.1% earnings for cash, my best guess is that I am at something like 5/8 or 5/7. I just don't like the F right now. Wish I did though:laugh:.

 

[Boghie]

By the way, JPCavin pointed me to the Portfolio Visualizer 'Backtest Portfolio Asset Class Allocation' site. I think the best fits for our funds are as follows:

• G: Cash / Money Market - You will get some Alpha in comparison here
• F: Total Bond
• C: Large Cap Blend
• S: Small Cap Blend - This is the most variant as far as matching
• I: International Developed Markets

My current 40/0/27/23/10 allocation results in:

• Expected Return: 7.51% (4.79% after inflation)
• Expected Risk: 10.58%

My previous Conservative 50/0/26/16/8 allocation resulted in:

• Expected Return: 6.87% (4.16% after inflation)
• Expected Risk: 8.86%

The S&P500 0/0/100/0/0 allocation results in:

• Expected Return: 10.28% (7.48% after inflation)
• Expected Risk: 17.78%

Why don't I just stay in the C Fund? Look at the risk. If you use the site, look at the max drawdown. Remember 2008 and 2009 and how fast big chunks of that drawdown occurred. When I was younger and broker and didn't have a wife and a dog and a cat I was always in C/S/I. I will be fully invested if the market is in a stable upswing, but it ain't stable.

However, remember 'risk' is really just a more advanced data aware standard deviation. That means that 67% of the time the market is bounded +Std (yuk, yuk) and -Std from the expected return. Two deviations occur 95% of the time, and a 2008/9 style crash of more than 3 deviations occurs like 1% or 2% of the time. But, look positively too. Folks forget that. And, the market biases to the positive. Love those outliers to the positive. Gotta have a chunk of that - while hopefully moving to the Lilly Pad in time to avoid the worst.

 

[Boghie]

Just thinking.
Just sitting in the tall grass.
Looking around, hunting might be good.
The chase could be invigorating.



Kinda hungry after sitting around so long.
Gotta stretch the legs, But that last morsel is still being chewed on.
Are the weak still out there, or have they been flushed out - I can't tell
But, yummy tasty morsels on the hoof are hard to resist - just don't want to be one.

My current 40/0/27/23/10 allocation results in:

Expected Return: 7.51% (4.79% after inflation)
Expected Risk: 10.58%
​

I am thinking of culling the herd at 4/21/32/29/14 for a bit more sustenance:

Expected Return: 8.94% (6.18% after inflation)
Expected Risk: 13.05%​

The S&P500 0/0/100/0/0 allocation results in:

Expected Return: 10.28% (7.48% after inflation)
Expected Risk: 17.78%​

Is greed good? Do I need the additional risk of just burning energy to meet my goals? Am I scared of the poachers out there that want to sell my left third claw to some Chinese dude with small hands and a Napoleon complex? All true, all very true. So I think I will lounge around, watching for the weak, and see what happens in a few days.

 

[Boghie]

Well, a bad report doesn't faze things. Want to be more in-the-market, but waiting for a dip. I've been waiting too long. Here goes:

• G: 4% - Standard Edelman allocation (kinda dumb in our environment)
• F: 21% - That knife keeps sitting on the table. Kinda barbaric not to use it
• C: 32% - Safish allocation
• S: 29% - This one should attain me some alpha - or hurt if the market fails
• I: 14% - I'm simply not paying attention

Annual Return: 8.91%
Expected Variance: 13.05%

 

[Boghie]

Re(1): 'The Year of Disillusion', The Belmont Club, Richard Fernandez

Fernandez has been integrating the concept of 'design margin' into his discussions. While he does not directly use the concept in this article, that concept lays insidiously behind the scenes.

By the same token Trump or Cruz can try to bring back the jobs, but it won't be easy; it certainly won't be quick. Although Labor's Jeremy Corbyn has promised to keep the steel works open with government money, in much the same way as Sanders or the CTU [Boghie: Chicago Teacher's Union] or California would mandate increases to solve the downward mobility problem perhaps enough people are beginning to realize this no longer works if ever it did. The parties are selling merchandise that is no longer in production.

Beware of promises that cannot be met...

 

[ContrarianJeff]

Hey Boghie--I just wanted to say hi. I apologize for checking out so long from the TSP Talk site. Been very busy with a lot of stuff. But it's good. I'm going to try to stay more active on the site. Hope you're doing well! God bless.

 

[Boghie]

Hey Boghie--I just wanted to say hi. I apologize for checking out so long from the TSP Talk site. Been very busy with a lot of stuff. But it's good. I'm going to try to stay more active on the site. Hope you're doing well! God bless.

Anyone around here notice our silent Contrarian's returns this year...

Anyway, I am trying to take advantage of dumb money moving around with this IFT allocation:

• G: 0% - moving this basically to I to overweight the I
• F: 20% - some Eurotrash panic money will be moving here.
• C: 32% - Holding this
• S: 30% - Basically holding this
• I: 18% - Overweighting this

CAGR: 10.40%
Risk: 14.63%
Best: 35.48%
Worst: -29.09%
Max Drawdown: -30.75%

Thoughts: The I fund is Developed International. That includes Japan. It still includes a Britain that no longer has to subsidize the retired at work French 'employees'. It still includes Germany and the Netherlands who will probably want to bail from the EU soon - that will be another chance to overweight. If the EU remained a trading and financial block than I think it should remain - but when it became a political mess than I think it better to break up. I kinda like Britain's future now that they dumped the politicians clinging on the EU...

 

[Boghie]

Well that has been yummy. My tummy is all full. I'll just sit here in the tall grass and sun myself all weekend long

That number on the left side of my Account Balance just bumped up. I like that. I very much like that.

 

[Boghie]

I allowed the Trump Rally to overweight my allocation to risk a little. Very yummy. Who could have guessed that the market would make such a strong move when an anti-business president is replaced by a pro-business president elect. Who would have known.

• G: 0% - Why sit in cash
• F: 17% - The equities market has moved strongly. This thing dropped a bit as well
• C: 33% - Market strength is overweighting this from the super science allocation
• S: 32% - Market strength is overweighting this from the super science allocation
• I: 18% - This one is just holding its own

CAGR: 9.04%
Risk: 13.19%
Best: 31.64%
Worst: -30.33%
Max Drawdown: -44.87%
​

Go Trump. Uuuhhhhhhh

 

[Boghie]

What a boring market to trade in...

Just sit around and eat caviar, drink champagne, and smoke weed. Even a Lib can do it... :cheesy:

 

[alevin]

Welcome back Boghie, missed you around here.

 

[Boghie]

Geez,

My allocation seems to be a sweet spot. When equities 'crash' my Flunky Bonds go up a bit. I was thinking F would crash, but not so much. In fact, my current allocation percentages have barely moved.

My IFTs have been non-existent. Very happy with this allocation. How boring...

 

[coolhand]

Geez,

My allocation seems to be a sweet spot. When equities 'crash' my Flunky Bonds go up a bit. I was thinking F would crash, but not so much. In fact, my current allocation percentages have barely moved.

My IFTs have been non-existent. Very happy with this allocation. How boring...

Hello Boghie. I was in San Diego last week, but was too busy to try and reach out to anyone. How are you doing? :smile:

 

[Boghie]

The Trump rally is petering out. Trump is a Clinton era conservative Democrat who believes in well run big government. Somewhere down the line we will find that big gubmint is dumb at the core. Maybe this summer!!!

•G: 39% - Interest is now 2.5% and growing. Kinda sucks, but doesn't suck as bad as it used to.
•F: 14% - Still waiting for the correction. Don't like. Sucks lots
•C: 20% - Obama bozo'd economy already corrected. Now it is almost the Trump economy. Don't know, probably needs a downside correction.
•S: 15% - Obama bozo'd economy already corrected. Now it is almost the Trump economy. Don't know, probably needs a downside correction.
•I: 12% - Kinda sucks. These socialists need a smackdown - which is likely coming.

Gotta get home to get the projected stats. This is more or less a conservative allocation that shows little confidence in the 'F Fund'

 

[Boghie]

Hello Boghie. I was in San Diego last week, but was too busy to try and reach out to anyone. How are you doing? :smile:

Doing OK, looking to migrate to the private sector in the Raleigh, NC area. Kalefornea is looking like Dumber and Dummber III...

 

[coolhand]

Doing OK, looking to migrate to the private sector in the Raleigh, NC area. Kalefornea is looking like Dumber and Dummber III...

Yeah, my 2 oldest daughters live in SD with their families and I worry about the longer-term out there for them. I left 16 years ago and never looked back.

Glad you're doing well. Had dinner in the Old Spaghetti Factory in the Gaslamp while I was out there. It was very good are pretty reasonably priced considering the prices overall in the area.

 

[Boghie]

Well folks,

You probably thought I croaked - but, you aint that lucky!!!

Migrated like a Reverse Oki to North Carolina where the sun is still good, the cost of living awesome, and the taxes light and understandable. Tried to get a job in the private sector - but, good god those companies move even slower than the gubmint so I took a great job in a field I enjoy that has promotion potential. That is, in the data management and presentation sector of the computing field. At the very worse this job will refresh my resume - but, I am enjoying it.

Anyway, you guys are lucky because all those changes in the wind kinda forced me to run to the hills in TSP. I became non-competitive. Yuk, yuk. Will probably be moving to more risk soon now that I can effectively watch my account.

Gotta go. Looks like another 75 degree day in Raleigh from this side of the window:smile:

 

[nasa1974]

Well folks,

You probably thought I croaked - but, you aint that lucky!!!

Migrated like a Reverse Oki to North Carolina where the sun is still good, the cost of living awesome, and the taxes light and understandable. Tried to get a job in the private sector - but, good god those companies move even slower than the gubmint so I took a great job in a field I enjoy that has promotion potential. That is, in the data management and presentation sector of the computing field. At the very worse this job will refresh my resume - but, I am enjoying it.

Anyway, you guys are lucky because all those changes in the wind kinda forced me to run to the hills in TSP. I became non-competitive. Yuk, yuk. Will probably be moving to more risk soon now that I can effectively watch my account.

Gotta go. Looks like another 75 degree day in Raleigh from this side of the window:smile:

38 degrees and rainy with a chance of flurries here on the north coast.