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CHASING RETURNS
- Thread starter garnertr
- Start date
imported post
Sr wrote:
Sr,
The Efficient Market Hypothesis (EMH) states that it isimpossible to beat the market because prices, which for the most part are set by professional traders, already incorporate and reflect all relevant information. If EMH is true, and I haven’t seen or read anything that successfully refutes it, then none of us TSPers could have known that the S Fund would outperformall of the other funds YTD. In other words, don't beat yourself up formaking a bad call. No one can consistentlymake that call.
Consequently, unless you are Warren Buffet or Peter Lynch, the safe approach is to hedge your bets and invest passively in the TSP funds that represent the major asset classes, i.e. bonds, large caps, small caps, and international.
With a passive, diversified approach, you won’t get the highest return – 100% of the best performing fund gets you the highest return. And, you won’t get the worst return - 100% I Fund so far in 2005 does that trick. However, youshould get a good annualized return over time that beats inflation and reflects the growth of the U.S. and established international economies.
Sr wrote:
Sr,
The Efficient Market Hypothesis (EMH) states that it isimpossible to beat the market because prices, which for the most part are set by professional traders, already incorporate and reflect all relevant information. If EMH is true, and I haven’t seen or read anything that successfully refutes it, then none of us TSPers could have known that the S Fund would outperformall of the other funds YTD. In other words, don't beat yourself up formaking a bad call. No one can consistentlymake that call.
Consequently, unless you are Warren Buffet or Peter Lynch, the safe approach is to hedge your bets and invest passively in the TSP funds that represent the major asset classes, i.e. bonds, large caps, small caps, and international.
With a passive, diversified approach, you won’t get the highest return – 100% of the best performing fund gets you the highest return. And, you won’t get the worst return - 100% I Fund so far in 2005 does that trick. However, youshould get a good annualized return over time that beats inflation and reflects the growth of the U.S. and established international economies.
imported post
68% currently trailing the passive strategy, interesting. I have read that roughly 70-80% of active institutional money managers do not beat the long run market averages and so, it appears that the active TSPers arein line with the averages. Granted, it is impossible to draw conclusions based on such a short time period but it is still interesting nonetheless.
68% currently trailing the passive strategy, interesting. I have read that roughly 70-80% of active institutional money managers do not beat the long run market averages and so, it appears that the active TSPers arein line with the averages. Granted, it is impossible to draw conclusions based on such a short time period but it is still interesting nonetheless.
imported post
TSP and other major asset class expsoure? Well, the "market" these days seem to favor real estate, utilities, oil, emerging market outside(not european per se)and sometimes even gold/ natural resources. C and S funds are exposed to these sectors to some extent ofcourse. Sadly not to the extent to make a dent in this type ofmarket. Patience is an underrated virtue.
TSP and other major asset class expsoure? Well, the "market" these days seem to favor real estate, utilities, oil, emerging market outside(not european per se)and sometimes even gold/ natural resources. C and S funds are exposed to these sectors to some extent ofcourse. Sadly not to the extent to make a dent in this type ofmarket. Patience is an underrated virtue.
G
Guest
Guest
imported post
rokid wrote:
rokid wrote:
I wish you wouldn't feel that way, rokid. I've always valued your opinions.I can see that statement was a waste of electrons. I'll just stick with my passive allocation and we can compare resultsat the end of the year.
imported post
WW,
I'm not upset. I was just trying to be funny.
What I'm doing is working for me. Hopefully, market timing is working for others.The rest is just a livelyexchange of ideas and investment philosophies.
However, thanks for your concern.
Here's to high returns for all TSPers. We deserve it.:^
WW,
I'm not upset. I was just trying to be funny.
What I'm doing is working for me. Hopefully, market timing is working for others.The rest is just a livelyexchange of ideas and investment philosophies.
However, thanks for your concern.
Here's to high returns for all TSPers. We deserve it.:^
G
Guest
Guest
imported post
rokid,
rokid,
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