I Give Up!

[RLR#4]

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I had (have) until 31 May to play around with my TSP due my retirement being effective on that day. I had hoped, by following what was going on here. to pick up a few more $$$$$$$$$$ in my account. But alas, foiled again. Staying with the G the rest of the way. RLR #4:v

 

[tsptalk]

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You are retiring at the end of the month? Congratulations!

But let me get this staight. You joined us on May 12th and wanted to make extra money before you retire May 31st? You have to be a little realistic.I have been saying continuously that the short term is very uncertain. Specifically in my May 12th comments (The day you joined us)I said,

"The market gave us a much needed bounce yesterday. It is nice to see that bounce comes off of the 200 day EMA (exponential moving average).[Which was 1080 at the time] That is the blue line on the chart below. The 200 day moving average is a nice, clean place for a pullback to find support during a bull market.

As long as we stay above that line, or quickly bounce back over it if we do fall below it, I will feel strongly that the bull market is still intact. We have been above that line since the current bull market started in early 2003.

In the short term we may flirt with that line as the bulls and bears battle over the next longer term trend."

As I said, the S&P 500 200 day ema was 1080 at the time. Right now the S&P 500 is 1084. I have also said several times that we will probably test the lowsmade in March (1087).

Sorry to hear you are giving up but I don't blame you if you need your funds for retirement. If you do plan on reinvesting someday, I would suggest you wait until the end of the summer. I believe the uncertainty should be cleared up by then.

If anyone considers themselves a conservative investor, by all means get out and wait for things to clear up. That could take some time however and you do risk a potential good rally.The market is in a very tough position and if you don't like to gamble a bit,I would suggest either get out and wait, or get in and don't look for about 6-7 months.

Tom

 

[tsptalk]

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A little more on the "I give up!" post. I have stated the market will not bottom until we see a capitulation.

ca·pit·u·late (kə-pĭch'ə-lāt')

intr.v., -lat·ed, -lat·ing, -lates.

1. To surrender under specified conditions; come to terms.
2. To give up all resistance; acquiesce.

I don't want to pick on this poor guy (or gal) as they were just trying to makefew extra bucks in the short term, but thisgive up attitude is just whatis needed by the masses (I call the herd) in order to put in a bottom. Whether we have seen the bottom, or if we still have a few percetage points to go, eventually the bulls surrender (capitulate, give up) and sell their remaining positions. Then there is nowhere to go but up. If you've been following for a while you know all about investor sentiment and how the herd is usually wrong at market extremes.

The problem with capitulation is that the downward action can be bad. Bad enough to try to get us all to say "I give up!" Whether we have seen this already remains to be seen. Sentiment is getting bad (which is good) but it is not at extreme levels just yet. It doesn't always have to get to that point but I would feel better if we were already there.

Be careful out there, but be ready to pounce if you haven't already.
Tom

 

[ChuckBecker]

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Tom,

So very well put. I sense there's a fair bit of money sitting on the sidelines (someone knows for sure) waiting for the opportunity to buy bargains.

r/Chuck

 

[RLR#4]

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In regards to my "I give up" post. Perhaps I should have clarified it a bit. I actually was not aware that this site existed until about a month to six weeks ago. I had spent my time trying to outguess the markets.If there is one thing I am not, its someone who knows what is going on as far as investments and the stock market go. When I found the site I thought, Aha!, maybe I can follow someone's lead and make a few more dollars in my TSP account. I plan to start drawing on my money after retirement on 31 May and a few extra dollars would have been "gravy"! But instead of gaining I lost. So that is why I "gave up".

 

[tsptalk]

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RLR -
I think I know what you meant and I'm sorry if I picked on your post. It was just such a nice opportunity to talk about a concept I've mentioned many times. I really hate to see anyone lose money but when stocks and bonds are dropping it is hard for anyone in TSP to make money. The G fund picked up .02 in that time so that would have been ouronly chance.

So are you taking out all of your money on May 31st in an annuity?Is that why you will be getting out? Sorry we couldn't make you a few extra bucks. I hope you learned something because that is my main goal (and learning to goto another site doesn't count ). I have been doing this for 20 years and I learn something new every week.

Best of luck to you!
Tom

 

[azanon]

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RLR#4,

Its a common misconception that one thinks they should go to a "G" fund soon before or during retirement. That would be, in my opinion, a mistake. "Risk" is often only partially understood by investors. Most everyone understands the first part of risk - that they my lose their principle in riskier investments like stocks. However, only some understand that by NOT continuing to use superior investments like stocks, they risk not being able to keep up with inflation, or maintaining their principle at a level that can provide you with income for 20-30 years or more of retirement.

If you're looking for a "set it, and forgetabout it" portfolio, the going wisdom is 110 minus your age should be invested in stocks. This formula does not expire at retirement.

 

[VictorPR]

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Tom, I read your articles regarding the different changes of allocations as you guys move from one fund to another and it looks like you guys are able to move it almost (effective) thenext day, when I make a change in allocations it takes me two (2) days for it to take effect. It does not take effect until the following day after the market is posted. Is there any way to expedite the transfer of that is the way it is. Thank you for the information.

 

[tsptalk]

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Tom, I read your articles regarding the different changes of allocations as you guys move from one fund to another and it looks like you guys are able to move it almost (effective) the next day, when I make a change in allocations it takes me two (2) days for it to take effect. It does not take effect until the following day after the market is posted. Is there any way to expedite the transfer of that is the way it is. Thank you for the information.

When you say it takes two days for it to take effect, are you going by the balance and/or interfund transfer page on tsp.gov?

Next time you make a transfer (assuming youdo it prior to the noon ET deadline) write down your account balance before you make the change, then again the next morning and then again that night. See if you can see when the change is made and how it affected your balance. Also take a look at your email confirmation when you get it. See if there is an effective date.

The transfer should be effective the day after you make your change (provided it was done before the deadline) but the information is updated right away. It will be updated after they do their daily processing.

Keep us posted.

Thanks,
Tom

 

[Mr. Duke]

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Vic

I normally make a transfer before 6 am say Monday and come Tuesday morning I am in the market, however I will not see the gains from Tuesday until after 6am Wednesday....tracking the dollar value is what I do also...in fact on some days ...losingor gaining days ...I have noticed that I may not get the full impact of the gain/loss because it seems like it took place somewhere in the middle of the trading day (ie; percentage of gain/loss on balance is not what the fund did for the last day...

Anyone else notice the partial gain/loss?:?

 

[plto6]

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I find that if I make an inter-fund transfer before noon ET it will buy the stocks at the share price at the COB for that day with the amount of money transfersand will be reflected in the next day account balance which should be the same total as the day before. The total stays the same only the number of shares change

SAMPLE

Transfer $50,000



26 May 2004 27 May 2004

G 50,000 G

FF

CC 25,000

SS 25,000

II

Total in account 50,000 Total in account 50,000

 

[Mr. Duke]

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Seems like your same balance was reflected, (one fund to another) but it doesn't appear that fund was actually in the market...