Boghies Account Talk

[burrocrat]

thanks for all the info, looks like i got some work to do, sounds like what i was looking for.

santa will have that under the tree for me i'm sure, next to a pretty little handheld bang bang. stockings are for small stuff like cleaning kits, magazines, and ammo.

 

[Boghie]

Moderate Allocation - Odd Christmass

Stuff can happen this Christmas, but why be in the market like a retiree when one has a 20 year timeframe?

G: 2%
F: 23%
C: 45%
S: 15%
I: 15%

This is a moderate/growth allocation.

Don't have my Quicken Thingy, but it is based on an earlier study. I think average growth is 8%, average risk is 9%.

I'll look into into the growth and risk numbers tomorrow night...

 

[Boghie]

Allocation is King...

After review, my current allocation is invalid – but, not so much so that I am going to blow an IFT. I used a variant of my models found in my thread from some time ago. So, it is time for me to document my normal allocations.

My three standard allocations are built on Ric Edelman’s ‘Lies About Money’ and the Quicken’s ‘Portfolio Analyzer’ (based on Newport Group analysis).

A flat earther analysis of those portfolios provides (as of 2009/12/04):
Formatted: G/F/C/S/I Expected Return/Expected Risk : 2008 %, 2009 %, From 2007/10/09 %

Portfolio 30 (Conservative): 12/22/39/15/12 7%/9% : -23.62%, +21.43%, -9.96%
Portfolio 37 (Normal): 2/15/48/19/16 8%/11% : -30.93%, +25.02%, -17.27%
Portfolio 41 (Aggressive): 2/0/50/28/20 9%/13% : -37.63%, +27.76, -24.75%

Our individual funds are as follows:
Formatted: G/F/C/S/I Expected Return/Expected Risk : 2008 %, 2009 %, From 2007/10/09 %

G Fund Portfolio: 100/0/0/0/0 2%/0% : +3.75%, +2.75%, +7.71%
F Fund Portfolio: 0/100/0/0/0 4%/5% : +5.45%, +6.75%, +17.07%
C Fund Portfolio: 0/0/100/0/0 8%/16% : -36.99%, +25.47%, -26.20%
S Fund Portfolio: 0/0/0/100/0 10%/21% : -38.32%, +29.98%, -27.97%
I Fund Portfolio: 0/0/0/0/100 8%/17% : -44.43%, +31.57, -28.97%
L2040: 9/10/40/17/24 8%/10% : -31.53%, +24.30%, -19.46%
L2030: 20/9/36/15/20 7%/9% : -27.50%, +21.70%, -15.81%
L2020: 32/8/31/11/18 6%/8% : -22.77%, +18.54%, -11.83%
L2010: 64/6/17/5/8 4%/4% : -10.53%, +9.69%, -3.29%
LIncome: 74/6/12/3 3%/2% : -5.09%, +8.26%, +2.29%

Wow, 2008 and the first quarter of 2009 were massively ugly. It does prove that asset allocation is the most important element of investing. For those with a 20+ year investment horizon all of the allocation models (L2030, L2040, ED30, ED37, ED41) provided better return/risk results than the individual C/S/I funds. That is a factor or risk – and, we have been living in a very risky business.

Did I follow my own advice?

Not completely.

But, then again, I was involved in a very aggressive futures and options trading system for three years in the 90’s. Kinda got a good feel for tops and bottoms – I hope. Not everyone lived that dream. And, in actuality – even though I made some green – I don’t recommend it. The taxes were ugly and paid via my income, the tax preparation uglier, there were no dividends, the trading fees absolutely monstrous, and – contrary to public opinion – day trading in a choppy market is a sure path to an Alpo diet. But since the mid to late 90’s were so consistent I made mulla.

To make this horribly long post a bit shorter, I saw a frothy market top and started peeling away at my riskier investments. If I hadn’t been so smart by half in October 2008 (thinking a market bottom had been reached) I would have been in a better situation. Oh, well – proof that it will be dumb to follow my dumb money moves :cheesy:. So, 2008 and 2009 we were in a rapid swing trading market. Like 2000 and 2001 they were not investing markets. Now, not so much. Still dangerous, but I don’t think we are talking about crashes outside the mean. The normal risk is very survivable.

Back to basics.

So boring.

 

[Bullitt]

Re: Allocation is King...

But, then again, I was involved in a very aggressive futures and options trading system for three years in the 90’s. Kinda got a good feel for tops and bottoms – I hope. Not everyone lived that dream. And, in actuality – even though I made some green – I don’t recommend it. The taxes were ugly and paid via my income, the tax preparation uglier, there were no dividends, the trading fees absolutely monstrous, and – contrary to public opinion – day trading in a choppy market is a sure path to an Alpo diet. But since the mid to late 90’s were so consistent I made mulla.

Very interesting Boghie. Thanks for your honesty. It's so easy to get lured into Forex and the other technical trading hoopla and the Carnie's that sell these products never warn of the tax nightmare that it causes. I did a practice Forex account with FXCM and almost considered opening a micro account. Do you know how long it took me to find decent answers on tax consequences of a Futures or Forex account? It took a long time.

I think people get lured into these devices by predators such as Jimmy Johnson and are all smiles at first, lose money or break even in a hurry, then in the end when the tax man strikes, they end up in the sewer because they were duped and didn't understand all the ins and outs. These people end up so embarrassed by their gullibility that they don't do their peers a favor by telling the horror stories for most Forex investors.

Glad you made some cash though in your endeavors. I'll never forget a high school economics teacher in 1996 who always bragged about how his net worth was over a million dollars. Ha, he was probably a bag holder in the end.

Quick question on your asset allocation. Looks good, but how often do you plan on re-balancing? Where will your bi-weekly contributions be going?

 

[Boghie]

Reallocation

Bullitt,

Your additional info on day trading (I was in the Foreign exchange as part of the system) should slam the door shut on the rest of us rubes. We are rubes because we have day jobs – it is hard to stare at a commoditied price computer squiggle when you should be starting at a toilet paper purchase requisition or something. I made mulla for only two reasons:

1. The trading system was automated – and, the trades were made on the Chicago floor. I wasn’t hiding in my Government Office Cubical trying to time a day trade. One neat thing was that the few times I called the big house I heard the yelling, screaming, and bells. Those guys are frantic.
2. The mid to late 1990s were an incredibly stable market for indexes, commodities, and money. The day trades lengthened to week or multi-week trades. Yumy.

When those markets became choppy, and my trade expenses grew dramatically as a result, I ended up bailing. Can’t say I didn’t lose a lot of paper profit. Kinda like gambling.

Anyway, my bi-weekly contributions are – and will be:

C: 40%
S: 30%
I: 30%​

Why invest in cash when that is a free bail out IFT?

Rebalancing is a bit tougher because of the IFT limitation. Who wants to spend an IFT on a small rebalance? I think I will initiate a rebalance trade when one of the funds is 3% out of whack. A daily rebalance is one of the nice features of the L Funds. That is why I included them in my review. Anyway, even right now, I should adjust my current allocation to the Normal one. But, that would blow my final IFT for the month. That seems a high price for a minor reduction in annual risk (-1%). My two year trading habit is sure hard to break.

I’ve been swinging so long I am having trouble staying married [to an allocation].:nuts:

 

[Boghie]

Where is that Santa Claus Rally:laugh:

Glad I allocated in a balanced manner this month.
Very odd market, very odd.

Now, with a little news of some tech companies showing growth we turn around. This feels like either a market top or a market stabilization. Neither of which will make ma any money now...

 

[Boghie]

Everything in Moderation - Even Asset Allocation

Time to rebalance into one of my Asset Allocations. I have selected:

G/F/C/S/I Expected Return/Expected Risk : 2008 %, 2009 %, From 2007/10/09 %

Portfolio 30 (Conservative): 12/22/39/15/12 7%/9% : -23.62%, +21.43%, -9.96%
Portfolio 37 (Normal): 2/15/48/19/16 8%/11% : -30.93%, +25.02%, -17.27%
Portfolio 41 (Aggressive): 2/0/50/28/20 9%/13% : -37.63%, +27.76, -24.75%

I wanted to be in a Normal/Moderate allocation when I made the last IFT. This is where I should be. To be absoulutely honest I also want to increase my C and S holdings

I am not a slave to these allocations - but, there is 'science' in there somewhere. Ain't there.

 

[Scout333]

Might rebalance your accounts in months that you have an unused IFT when you get to the end of the month i.e. last day or two. Just a thought. i.e. Save your ammunition for more active months.

 

[Boghie]

Might rebalance your accounts in months that you have an unused IFT when you get to the end of the month i.e. last day or two. Just a thought. i.e. Save your ammunition for more active months.

Good point Scout...

This was an odd move on my part but I think I made the right move. The allocation I was in had little chance for growth. However, it had a high risk. Kinda dumb. Not exactly the best of both worlds:cheesy:

 

[burrocrat]

Re: Two Days Up/Two Days Down???

Burrocrat,

It is actually the interface for Quicken that pointed me to TSPTalk. I have never run into 1212Computer anywhere on this site, but he/she keeps an up to date file that can be imported into Quicken for G/F/C/S/I/L Funds. Here is the link. I followed his/her instructions to the T and have had no problems.

I also see he/she has some charts that might be interesting.

You are, of course, familiar with the AutoTracker. Look at the very bottom for some matricies. I especially like the 'Return Analysis'. Gives me a good place to look at the allocations of folks I follow - and see how they are doing.

Finally, the links to the Yahoo EFT charts for our fund proxies allows you to play with the charting tools the brainiacs around here understand. Fun, sometimes useful, but watch out. Not for ignits like me

You have to use Quicken Premier. That is the one with investment tracking. The juiciest thing I have found lately is actually a report - namely, the 'Investment Performance' report. Make certain you use the Buy/Sell transaction actions rather than the Add/Remove actions. Then you can get Internal Rates of Return by whatever duration you want. Other than the Retirement Planner, that is the best tool I have run across. Keeps you honest. Also, make certain you place the TSP fund 'securities' you create (as instructed by 1212Computer) into a single 'account'. That way, you can group all the TSP Funds ('Securities') together and see stats as a whole - or separately. I can't say its easy to use, or that it always rings true - but it is a good tool.

Boghie, i just couldn't wait any longer so opened my new copy of Quicken Premier and installed it last night. It grabbed multiple checking/savings account transaction data after entering passwords, although i'm going to have to go back in and update categories for accuracy. Pretty cool so far.

I haven't checked out the investing features or the links you suggested yet but i plan on it this weekend and will get it set up. I want to enter all TSP transactions (3.5 yrs) to get an accurate historical perspective of how i think i've been doing. I assume i create the account then work backwards and fill in data? Would the TSP quarterly reports have the information i need if i didn't exactly keep track of all that until just lately?

Can i clutter up your thread with these questions or would you rather see them asked somewhere else?

Thanks, burrocrat.

 

[Boghie]

Sittin' Back, Awaiting My Turn...

A year, a shovel behind Nine Nazgul
Should be a time of rest.
The terror behind.

Is that a good thing? Is that a safe thing?

And, now, only a fast moving Tom1Tom1 in striking range. Resting. Easing. Like a lion in the savanna. He has made his kill. He is feasting. Still watching…

The others, sinking their teeth into the vitals of a kill – still straining.

Alas, for this poor hunter there is nothing left on the field.

And, the Nine Nazgul (now eight) stalk.

A camper builds a fire.

An Ent strikes

 

[Boghie]

Re: Two Days Up/Two Days Down???

I haven't checked out the investing features or the links you suggested yet but i plan on it this weekend and will get it set up. I want to enter all TSP transactions (3.5 yrs) to get an accurate historical perspective of how i think i've been doing. I assume i create the account then work backwards and fill in data? Would the TSP quarterly reports have the information i need if i didn't exactly keep track of all that until just lately?

BurroCrat,

Looks like Santa knew exactly what you wanted. My hope is that Santa will magically upgrade my copy of Quicken as well...

Anyway, some tips:

The first thing I would do use some of the tools TSPTalp provides. The initial one would be TSP Share Prices & Financial Software Data Files to enter all the TSP share prices since a real long time ago.

Then, grab a copy of the IFT Decoder Wheel to help manage the allocation adjustments you have made over time. (Tom: Can this be put in the TSP Utilities section of the first page?). That spreadsheet is absolutely invaluable when making a change to your TSP allocation holdings.

Then, you can start the ugly process of entering your contributions. You really don't need the original paperwork - paystubs show it (MyPay) and contribution amounts and allocations are normally stable. Then, I would enter the first contribution (using the 'securities' created in step one. Make certain you use the 'Buy Shares' option - that is needed to get an Internal Rate of Return. Then use the 'Copy Transaction' and 'Paste Transaction' menu options. Be careful. You will have to change dates, share count, and share prices for each contribution for each security. (Helpful hint: On the 'Enter Transaction' form place a '0' in 'Number of Shares', place the total amount of money contributed to the fund in the 'Total Cost' field, and then place the share price in 'Price Paid'. Quicken will then prompt you with some possible math actions - select 'Number of Shares'. That is the best way to get the 'Share Count').

After all that stuff, you can use the Decoder Wheel to enter your IFT transactions.

Then, regretfully, you can use a 'Report | Investment Reports | Performance' report to attain the golden ring - the IRR. If like the rest of us you will be a bit disappointed - but, last year was once in a lifetime. Hopefully:toung:


By the way, your comments are not clutter in any way at any time.

Merry Christmas

 

[nasa1974]

Boghie and burrocrat,

I use an Excel spreedsheet (office 2007) to follow my real time TSP. If your interested I can E-mail you a copy.

Merry Christmas.

 

[tsptalk]

Re: Two Days Up/Two Days Down???

(Tom: Can this be put in the TSP Utilities section of the first page?). That spreadsheet is absolutely invaluable when making a change to your TSP allocation holdings.

Done. I put it on the utilities page.

Thanks for the suggestion!

 

[Boghie]

Thoughts

Kinda watching...
Maybe thinking too much...
Maybe even thinking way too much...

But, I don't want to be anywhere near the market for the CPI and GDP reports.

I think, once again, we are in deflation. Maybe the December housing blip will keep us in mild inflation, maybe not. Likewise for GDP. Those reports come out mid month (CPI) and the end of the month (GDP). Construction spending and consumer credit the first full week of the year.

However, next week I think we will be pleasantly surprised by Case-Schiller because of the blip, likewise with consumer confidence. I think I will hedge a bit on Wednesday. Maybe to Portfolio 28 14/26/37/12/11 6%/8%

Dumb money will react positively

Watch for smart money moves after the holidays:suspicious:

However, when I put thought to the economic and political indicators I prove very bad in up markets - like this one

 

[Birchtree]

I was thinking just a minute ago how I'd like to be $2M in debt on margin by the end of June. That would mean we had a hellacious bull run the fist two quarters into 2010. If that happens I might try for $3M by the end of December. How's that for fantasy?

 

[burrocrat]

Re: Two Days Up/Two Days Down???

BurroCrat,

Looks like Santa knew exactly what you wanted. My hope is that Santa will magically upgrade my copy of Quicken as well...

Anyway, some tips:

The first thing I would do use some of the tools TSPTalp provides. The initial one would be TSP Share Prices & Financial Software Data Files to enter all the TSP share prices since a real long time ago.

Then, grab a copy of the IFT Decoder Wheel to help manage the allocation adjustments you have made over time. (Tom: Can this be put in the TSP Utilities section of the first page?). That spreadsheet is absolutely invaluable when making a change to your TSP allocation holdings.

Then, you can start the ugly process of entering your contributions. You really don't need the original paperwork - paystubs show it (MyPay) and contribution amounts and allocations are normally stable. Then, I would enter the first contribution (using the 'securities' created in step one. Make certain you use the 'Buy Shares' option - that is needed to get an Internal Rate of Return. Then use the 'Copy Transaction' and 'Paste Transaction' menu options. Be careful. You will have to change dates, share count, and share prices for each contribution for each security. (Helpful hint: On the 'Enter Transaction' form place a '0' in 'Number of Shares', place the total amount of money contributed to the fund in the 'Total Cost' field, and then place the share price in 'Price Paid'. Quicken will then prompt you with some possible math actions - select 'Number of Shares'. That is the best way to get the 'Share Count').

After all that stuff, you can use the Decoder Wheel to enter your IFT transactions.

Then, regretfully, you can use a 'Report | Investment Reports | Performance' report to attain the golden ring - the IRR. If like the rest of us you will be a bit disappointed - but, last year was once in a lifetime. Hopefully:toung:


By the way, your comments are not clutter in any way at any time.

Merry Christmas

So it is installed and i was able to get all checking/savings accounts updated and categorized, also got brokerage and roth ira accounts entered. I need to look into reports features more because it just doesn't seem simple or pop up with impressive graphics or charts showing just where what happened, i'm sure it's in there but i need to learn how to drive it first.

I didn't do anything with the tsp account except for download from tsp.gov all my quarterly statements, they show every payroll contribution and prices, all IFT's, etc. I decided to go that way because most times when i do an IFT i also do a Contribution Allocation change to keep them the same, and so they are all over the place, not consitent.

I did find the TSP Share Prices and Decoder Wheel utilities, but haven't downloaded or started there yet until i get everything tuned up and running.

I notice on the investment accounts the software also wants to download the basic indexes history, i assume i can eventually look at graphs that compare my actual returns to the indexes and the TSP funds performance?

Do you have to download new prices everyday? or can you skip a few and just plug in the missing ones (automatically) later?

Thanks for the info, i'll keep working on it.

 

[Boghie]

Re: Two Days Up/Two Days Down???

I did find the TSP Share Prices and Decoder Wheel utilities, but haven't downloaded or started there yet until i get everything tuned up and running.

I notice on the investment accounts the software also wants to download the basic indexes history, i assume i can eventually look at graphs that compare my actual returns to the indexes and the TSP funds performance?

Do you have to download new prices everyday? or can you skip a few and just plug in the missing ones (automatically) later?

Thanks for the info, i'll keep working on it.

Jeeze Burrocrat, Between you and me we could write a boring book

Anyway, I definitly DO NOT enter or download new prices everyday. I try to catch at least a couple per week and any big moves. And, you can use that 1212 TSP price history to catch em all. There is a life to live, eh...

If you can figure out how to get an 'Internal Rate of Return' for the S&P it would be much appreciated. I haven't figured out how to get the IRR for the indexes Quicken autoupdates...

 

[burrocrat]

Boghie and burrocrat,

I use an Excel spreedsheet (office 2007) to follow my real time TSP. If your interested I can E-mail you a copy.

Merry Christmas.

I'd like a copy of that please nasa1974, using ms office 2007 too, i do some calculations manually - just haven't built a simple spreadsheet yet, also compare that with what the brokerage website says, but things just don't seem to add up.

I'm thinking a simple calculation should show me what i want to know: current account balance - contributions in) / (contributions in) = gain/loss.

Is the logic behind that sound or am i missing something? my numbers vs. the brokerage's numbers just don't match. i'm assuming they would net out if i was in all cash, but there's always a few trades hanging out somewhere, often move in or out in 1/2 positions. maybe it's a FIFO thing or a realized/unrealized gain thing, just don't know yet.

 

[Boghie]

Birch,

I hope you can move fast if things go awry.

Two million buckollas in margin debt? Yowser...