EW_ret Account Talk

[EW_ret]

I have been lurking long enough (July 2004) on TSP Talk and thought I would start a thread to talk about how and why I make IFT moves. There are many smart people that frequent the TSPTalk forum. I appreciate other points of view.

I started 2006 with just 10% allocated to L 2020, so I had just 6.462% of my TSP account in the equity index funds and over 93% in G Fund. I made this move on 12-30-2005 because someone pointed out that many expected a drop in January 2006, and the market often humbles us small players. This I find to be so true. This very small euity allocation netted a return 0.27% on my TSP account over two days. I moved back to G 100% a COB yesterday, 1-4-2006.

Since July 2005, I have at most allocated 40% in the C, S, and I funds and have stayed away from F Fund altogther. I started these lower equity allocations because I was retiring in Sep 2005 and did not require higher returns (> 7%), and the risk that goes with it. I ran my asset/risk figures through Financial Engines to arrive at this conclusion.

 

[EW_ret]

January 2006 First Week Blastoff

It’s a big push up for the stock market today. What a week for the markets. Most everybody expected this big push up in December, but it waited until January. This first week in January 2006 the market indices are in the green +2.9% to +5.4%. That’s a whole month worth of gains in a good month.

I remain G 100%. Sure would be nice to have a crystal ball! Oh well, no risk no gain. I am in the asset preservation mode. Only 32% of my retirement assets are in equities and all my TSP is in G fund. My TSP represents 34% of my retirement assets.

 

[EW_ret]

Why fight the momentum? Went 30% into equities today (70% G, 15% C, 5% S, 10% I). Will likely be back to 100% G by Friday.

It appears many are increasing their equity positions today. I guess its safe since Tom is not jumping in.

 

[EW_ret]

Since the I Fund should be down today, I am making a inter-fund transfer of 5% from C to I Fund today. I will be 70% G, 10% C, 5% S, and 15% I by COB today.

I had mixed feelings this morning about moving 100% to G, but this would go contrary to my investment strategy. The big unknown is how the PPI report tomorrow will impact the market. I believe it will not be good news this time.

I should have increased my equity position to 50% (25C/10S/15I), but did not follow through because I have this sinking feeling that the market will make sudden move down within the next few days. I finally compromised by maintaining the 30% position in equities.

 

[EW_ret]

Today I moved to 85% G and stayed 15% in the I fund. I feel embarrassed on the misread I made on I fund direction yesterday. I thought it would end lower because of the strong dollar (+0.8 % to euro). Now, I believe it smart to stay the course a while longer in an attempt to recover the losses it will experience today. I am praying the C and S funds will have minimal loses today.:

 

[EW_ret]

Anticipating a rebound in I Fund tomorrow. Attempting to recover today’s big losses. It’s a gamble!

 

[EW_ret]

Well, the anticipated rebound in I fund did not happen. The losses in Japan and Pacific region only increased today. Hope the panic selling does not move to U.S markets. I was considering moving 20% to C Fund today. However, there remains uncertainty in our own markets, and a correction is likely. What is story in Japan markets? I will have to investigate.

I am now in hole for January to tune of about -0.5% in value of my TSP account. Should of gone 100% G fund last Friday, rather that remain in I Fund, and then double my position in I fund yesterday.

 

[EW_ret]

Getting "whipsawed" in I fund because I’m not staying the course when markets are down. The I fund kicked my b*t being down 2.63% for two days, and hearing talk that Japan markets had to stop trading due volume of sell orders. Sold the I fund yesterday and absorbed a 0.5% loss in my TSP account. Well, the recover day in I fund is today, rather yesterday as I had anticipated.

I’m putting my foot in the US markets today (80% G, 15% C, and 5% S) and staying the course for a while.

 

[EW_ret]

I added 10% to my equity positions in my TSP account today. I will be at 70% G, 20% C, and 10% S at COB today. I will be patient this time and not sell next week if market continues down. Will the S&P500 consolidation be swift and shallow to 1250 or long and deep to below 1200? High oil prices are a big contributor to a market correction.

The mid/small stocks (S Fund) appear stronger this morning, but they now appear to be caving in and the selling has pick up. Will market strengthen this afternoon to minimize losses? This would be good sign. If S&P finishes below 1270 today, I expect continued weakness next week.

I will consider adding to my equity position next week if the S&P500 falls below 1250.

 

[EW_ret]

Selling half my small equity position and transferring to the G fund in face of up market today. Just hope we finish up today. Maintaining a small equity position of 10% C and 5% S due to buying high last Thursday.

I was tempted to put money some in I fund today, but changed my mind at last minute. I got burned last week in I fund thinking it would rebound. The weaker dollar today should help offset the losses in I fund today. I’ am confused by disparity in MSI EAFE reading (+1.2%) and my estimated read that I fund should be down more than 0.50% today.

 

[EW_ret]

Selling my remaining equity position and transferring all to the G fund. Hope we finish up today. Retreating to the safety of G fund and await the next down trend.

I was again tempted to place a small amount in the I fund, as others are doing. The I fund should finish near unchanged today. I did not follow through because I got burned last week thinking I fund would rebound.

 

[EW_ret]

Patience is Difficult to Practice

I keep telling myself to be patient, and let the market pullback at least 3%. I’m still 100% G and waiting for a pullback to below 1260 in the S&P500 before I ease back into equities. It’s hard to be patient when you see the market surge ahead like what we saw Thursday and Friday of last week.

I also need to be patient when I am in equities. If I had stayed with my equity position (20% C, 10% S) through Friday of last week, I would now be positive for January. This would have added +0.467%. Instead I ended up negative for January with –0.34%. Patience, I need to find this virtue.

I need to stop worrying about losing dollars in my TSP and stay the course with a 30-40% equity position. Financial engines recommended a position of 65% G, 25% I, and 10% C using a conservative 0.70 risk factor. I don’t need my money in TSP until I am forced to start withdrawing at 71 years old.

 

[Birchtree]

Fear not

EWguy,

Give yourself a treat and go all in - let the current bull market provide you some gains. Use dollar cost averaging to your advantage and buy. Don't worry about a little pain - it's alright to suffer some - I've actually come to enjoy it myself - it's all about being tolerant. Financial Engines is fine except they have no stomach - that separates you from them. Have no fear of the bears, they are necessary to thin the bull riders. Have some fun.

Dennis - permabull #2

 

[EW_ret]

Thanks Birchtree

Thanks for the encouragement Birchtree! Your positive comments give me hope. I came up with a strategy how to increase my equity position, but I am waiting some pull-back.

Dollar cost averaging works best when one has contributions going into their TSP account. As your account grows in size the contributuions have less of impact on the average purchase price. Unfortunately, I have no contributions going into my account because I retired last year. All I can do is move small amounts by IFT over the next few months. Moving a few percent each week into C, S, and I would give me a better price. I’ve been thing about just using G and the L 2020 fund because this would allow fractional percent contributions into the underling C,S, and I funds. Moving three or four percent per week from G to L 2020 over four months would result in 51% to 68% in the L 2020 fund in four months. This would give me about 33% to 44% spread among C, S and I.

It’s uncanny how conservative I've become in my TSP account since last summer. Last year at this time I kept 40 to 80% in TSP equities. Now 40% is the upper boundary because my tolerance is lower. My Vanguard accounts have done much better than my TSP account because they limit your fund exchanges.

 

[EW_ret]

Start Price Average Buy Into Equities

I made IFT today to 96% G, 3% C, and 1% S Fund. The recent weakness in markets is near objective of 1260 in S&P500. Starting to slowly move back into equities over next two months.

Market could break below the 1263 support of S&P500. Hard to call today where S&P500 will end. I could have waited a few more days, but the objective is to make 10 or so buys of C and S funds over the next two months. My strategy is buy additional 3% to 5% of C and S funds with each purchase. This percentage could increase if S&P500 goes below 1230.

 

[EW_ret]

I made IFT today to 92% G, 4% C, 2% S, and 2% I. The weakness in markets makes patience hard to practice. I am moving back into equities and trying to to get a better average price.

S&P500 could break below the 1250 today. The S and I markets show continued weakness and make them a better buy. The objective is to make 10 or so buys of C, S, and I funds over the next two months. I have now added the I fund to the mix, and hope I do not regret it. My strategy is buy additional 3% to 5% with each purchase. This percentage could increase if S&P500 goes below 1230 (200 day average).

 

[EW_ret]

Lighten Up And Await Pull-Back

I made IFT today to 96% G, 3% C, and 1% S. I am removing the buys of yesterday and awaiting market weakness next week.

I am waiting for S&P500 could move below 1260 before buying more. My objective is to make 10 or so buys of C, S, and I funds over the next two months. My strategy is to buy an additional 3% to 5% with each purchase. This percentage could increase if S&P500 falls below 1230 (200 day average). I may also lighten up at times, like today.

The I fund payout today should be interesting. Some TSP Talk members claim it owes $0.09 a share from Tuesday, others say it needs to subtract $0.10/share due to Tuesday and Wednesday action. It could up unchanged today even though MSCI EAFE Developed appears to be up more than 1%.

 

[EW_ret]

I made IFT today 2-16-2006 to 94% G, 3% C, 1% S, and 2% I. Buying 2% of I Fund. I am waiting for U.S. market weakness before buying more C and S.

My strategy remains the same. My goal is to position myself to 30% to 40% equities over the next two months. By making incremental purchases I will get a better average price.

I added 2% I Fund because it has been the weaker of the equity funds this week. Buying the I Fund on a big down day often does not work because of Barclay's fair evaluation adjustments. Maybe buying the I Fund on a UP day for MSCI EAFE markets will get a better price. The risk I run is if US markets get real strong this afternoon, the adjustment to I Fund will make it expensive today

 

[EW_ret]

I made IFT today 2-17-2006 to 94% G, 3% C, 0% S, and 3% I. I am selling the S Fund and buying 1% more of I Fund.

I added to the I Fund because it has been weaker and yesterday it overpaid $0.10/share because of the strong U.S. markets in afternoon resulted in heavy late buying of internationals. It will likey end up with more than a 1% loss today, unless Barclay's adjusts its price upward again.

 

[EW_ret]

I made IFT 2-22-2006 to G Fund. Waiting for the downturn in US markets. The February seasonal chart for S&P500 shows the last trading day as up, but I believe the opposite will happen. There may be one more up day this week, but I am getting out of my 6% position today. But what do I know, I am almost even in my TSP account for YTD.