L2050 Fund

[Frixxxx]

Sorry CRWS

Oh I wish it were the stock market......

This was a qualifying comment. I mixed an apple and orange in my post and that was wrong.
:embarrest:

 

[tsptalk]

Ok Tom- it is now confirmed-

You can officially now request to make a trade into the L-2050 fund.

Here is what it looks like on the real TSP page:

View attachment 10534​

Thanks. I'll get that up in a couple hours.

 

[tsptalk]

Ok Tom- it is now confirmed-

You can officially now request to make a trade into the L-2050 fund.

Done!

The chances of it being error free are probably less than 50/50. Lots of changes as I removed the L2010 fund from the AutoTracker as well

 

[crws]

Sorry CRWS


This was a qualifying comment. I mixed an apple and orange in my post and that was wrong.
:embarrest:

No problem, I'm not worried. It looks like a fine mix to auto-pilot for a while. We've had a good run and now it looks to roughen up a bit, then we've got Apr-May.
Like I posted, even the L2040 had a 23% return over the last 5 years (if my math is right at this late hour), so as a slightly more aggressive fund,
(noted January 2011 allocations)

• G 3.5%
• F 7.0%
• C 43.8%
• S 18.9%
• I 26.8%

seems to me the L2050's got it covered.
It might be a tad light on the S, but the Daq has been smokin, and I wouldn't be surprised to see some M&A action with a fishing expedition by the larger purse strings.
Hell, Monday ain't gonna be no rocket to the stratosphere anyway, so I get to DCA with my .5% G contribution allocation.:laugh:
This fund times out in 2050, which will be way past my dirt naptime anyhew.... but in the meantime, oddly enough, it will be satisfying to see twice as many shares on the ticker, comparatively speaking.

If you check out the year over year spread of L2040 vs S Fund since 2040's inception 10/2004, it has only been the latter 1/2 of 2010 that the S Fund spread has decisively gone over $3.00/share, it had remained well within the initial range of about $2/share for the last 5 years.
It's a fine time to take some market R&R.

 

[KevinD]

crws - I was trying to reconcile the price of the 2050 in my own mind and this is what I came up with.

It's kinda like a stock split. Lets say you have 100 shares of XYZ and it splits. Now you have 200 shares but the $ value is still the same. I think it's the same with a reverse split. 200 shares becomes 100 shares but the total value is still the same in dollars.

The percentage gain/loss is calculated on total value so the number of shares doesn't matter. :blink:

I could be full of it but thats the best I could come up with...and I'm not sure I explained it all that well.

 

[crws]

crws - I was trying to reconcile the price of the 2050 in my own mind and this is what I came up with.

It's kinda like a stock split. Lets say you have 100 shares of XYZ and it splits. Now you have 200 shares but the $ value is still the same. I think it's the same with a reverse split. 200 shares becomes 100 shares but the total value is still the same in dollars.

The percentage gain/loss is calculated on total value so the number of shares doesn't matter. :blink:

I could be full of it but thats the best I could come up with...and I'm not sure I explained it all that well.

I like that analogy! Works for me.
Thanks!
'Course with the world events taking center stage, I might pack up and head for the barn, looking for lower entry-point days ahead.
eh- decisions, decisions.

 

[Fed1]

Good day,

I am newer at this trading stuff and have a question that I am trying to work through in my head. Regarding the L2050, I will hopefully be way retired by then (I have 20-25 years before I can retire). Reading the posts, it appears that the L2050 could go up 5-7 dollars in the next 5-8 years. Why would you not buy it low and hopefully sell it high in 8 years if that is how long it takes. Let's say, as an example, I buy 5000 shares at $10.30 (51,500)...in 8 years IF it goes up let's say 7 dollars (as some people said it may double by that time) to 17.3 a share I would have 86500 for a 35000 gain for just moving money and letting it sit (Avg of 4375 dollar increase a year over the 8 which believe is around 8.75%). Now I know that it can always go down but for those who have 10 + years to go it seems like a no brainer as I imagine it is at least going to go up a few dollars. I would love to hear thoughts on this strategy. Thanks.

 

[poolman]

Good day,

I am newer at this trading stuff and have a question that I am trying to work through in my head. Regarding the L2050, I will hopefully be way retired by then (I have 20-25 years before I can retire). Reading the posts, it appears that the L2050 could go up 5-7 dollars in the next 5-8 years. Why would you not buy it low and hopefully sell it high in 8 years if that is how long it takes. Let's say, as an example, I buy 5000 shares at $10.30 (51,500)...in 8 years IF it goes up let's say 7 dollars (as some people said it may double by that time) to 17.3 a share I would have 86500 for a 35000 gain for just moving money and letting it sit (Avg of 4375 dollar increase a year over the 8 which believe is around 8.75%). Now I know that it can always go down but for those who have 10 + years to go it seems like a no brainer as I imagine it is at least going to go up a few dollars. I would love to hear thoughts on this strategy. Thanks.

It sounds like you are giving an example of what you have heard or read in regards to the L2050 fund. You are thinking in terms of a Buy and Hold strategy. In 2008 the major in-dices and stocks on average lost 10 years worth of gains. Yes we have retraced 50% of this loss almost 3 years later.

I personally think I can Beat the example that you have shown above by being on my toes with what is going on in the Economy and what is going on with the stock market. I myself could not and would not follow the example you have shown above for fear of another 2008 collapse.

It is good that you are thinking of what to do with your money. You give an example of a strategy. But it is investing a certain way and turning your head Me personally, I don't have enough faith to follow it though. I have a limit to how far I am willing to slide downward percentage wise before I pull the plug and return to the garage.

Welcome to TspTalk.com and Good Luck.

P.S. I would Double Think the strategy you are proposing.

 

[Fed1]

I appreciate you comments poolman. That is one great thing about these forums...everybody helping each other in avoiding potential problems and losses.

I did do something close to what I suggested however I did keep back a lot of money that I can pour into the fund IF it goes down because I do believe that we are going to tank out soon especially with gas prices going up. Before I did what I did, i researched the L funds when they came out and when the 2008 thing happened (L2040 came out around 14.XX and when 2008 hit it dropped to 10.XX). Now I know that they can go down really low which is why I have a bunch of money sitting in reserve to either pump into the L fund or the I fund IF we do tank out to hopefully even out my loss should we tank.

Like I said I appreciate your help and advise.

 

[Napalm]

Does anyone else feel that TSP fund managers are "mandated" to place a higher percentage into US large cap (C fund) for all of their L funds than any normal fund manager would? It seems like Govt wants to help those companies recover, when they are the reason for the last big crash. Small caps are more flexible during recessions and have far better accounting practices when running a business. As of Dec 2, 2010, S&P 500 debt was figured at $7.25 trillion, so I see no justify for why TSP is forcing a larger percentage of your funds to be invested in the C fund. I wouldn't place a dime in the C fund until Corporate America and the Fed clean up their act before another crash occurs.

 

[Silverbird]

Since the "L" funds are for those who do not manage their TSP accounts and more or less is the alternative to parking in G or parking in C, the higher highs and lower lows of the S fund are beaten out by the C fund's less volitile actions - or at least that is the theory. If you want to manage your funds at all, I think the L's just do not cut it, especially because as time goes on your allocation automatically becomes more and more conservative - regardless of how the market is going.

 

[rcknfrewld]

the 2050 fund price is lower than the G...I can't get it thru my head that the share price doesn't matter...I could accumulate the most amount of shares by moving into the 2050...I know it's about % but isn't having more shares the ultimate goal to accumulating wealth

 

[Frixxxx]

The L Funds balance risk across the other funds. It is hard to get through your head I know, but each share is divisible by the "weight" of their investment. This is why they're "the lazy investor" alternative to "Buy and Hold"

 

[SkyPilot]

If you are looking at "shares", then you must consider the other factors that neccessarily are share related. Along with quantity, you must also consider value. More shares with less value (along with price) does not equal greater gain. In TSP, shares are an illussion, that is to say, just an expression of the dollar value of your account, and a helpful way of understanding the value relationship between the funds. If you understand that the primary funds were issued at $10 per share when they started using shares, you can see what the funds have done in relationship to each other. You could make this same comparison by looking at percentage growth between the funds during a particular time period. If they removed the "shares" expression tomorrow, it would make no difference. Notice, they do not give you the option to allocate by number of shares, only by "%". And remember, the L "funds" are not funds at all... they are merely composite expressions of the GFCSI funds. They have no dynamics of their own, apart from re-allocating ever more conservatively.

the 2050 fund price is lower than the G...I can't get it thru my head that the share price doesn't matter...I could accumulate the most amount of shares by moving into the 2050...I know it's about % but isn't having more shares the ultimate goal to accumulating wealth

 

[rcknfrewld]

so our share prices should only be viewed to see where they came from and where they might go...the prices give us a historical road map to navigate potential tops and bottoms...would a mimic allocation of the 2050 be better...it would be the same I guess except for the rebalancing...

 

[PessOptimist]

If you are looking at "shares", then you must consider the other factors that neccessarily are share related. Along with quantity, you must also consider value. More shares with less value (along with price) does not equal greater gain. In TSP, shares are an illussion, that is to say, just an expression of the dollar value of your account, and a helpful way of understanding the value relationship between the funds. If you understand that the primary funds were issued at $10 per share when they started using shares, you can see what the funds have done in relationship to each other. You could make this same comparison by looking at percentage growth between the funds during a particular time period. If they removed the "shares" expression tomorrow, it would make no difference. Notice, they do not give you the option to allocate by number of shares, only by "%". And remember, the L "funds" are not funds at all... they are merely composite expressions of the GFCSI funds. They have no dynamics of their own, apart from re-allocating ever more conservatively.

What SP said.

When I first started with this thing in 97, there were three funds, G, C and F. You got a statement showing the percentages and value of these funds and the whole account. Sort of like "trust us, we're from the gubmint". At one point they created shares by dividing members holdings in each fund by 10. Anyone remember when that was? I noticed it during my long ago search of old statements but was looking for contributions and balance only so didn't document it. IIRC it was around 2003? Whenever, it did make grasping the whole thing easier for some of us.

Along the "does anyone remember" line, when did they create S, I and the L funds?

To me, using the nebulous "shares" method makes it easier to put in a spread sheet. If I owned 1000 shares of C on 11/20/08, the were worth $8,660. Today, 7/23/13, those same shares are worth $21,644. On the other hand on 3/10/09 those shares were worth $7368. Do the math however you like. Just look at the $ amounts. This market is not always going up.

Most of the very valuable spreadsheet tools here on TSP talk that have any age on them use percentages. The reason is that back in the day there was no other way to track your daily balance. I believe that is why the autotracker works the way it does. Some respect and kudos to all the old heads on the board for figuring this out.

About that L2050 Fund.

In one place on the TSP.gov site it states the allocations for L funds will be adjusted quarterly. The info sheet at https://www.tsp.gov/PDF/formspubs/LFunds.pdf shows the Jan 13 spread as G4 F8 C43 S19 I26.

It states:

"The five L Funds were designed for the TSP by Mercer Investment Consulting,
Inc. The asset allocations are based on Mercer’s assumptions regarding future
investment returns, inflation, economic growth, and interest rates."

No info on who on the FRTIB members own what or who MIC Inc donates what to.

If you were to choose to you could split your own payday allocation to the above percentages and do an IFT to match them. Of course you would not be able to adjust it "daily" as stated in the info sheet.

I have nothing against the L funds and have advised co-workers (once they figured out how to log in) to at least move some of their G to one of the L funds while exploring options. Now I advise them that the market has been going up for a long time and they are on there own.

To all the newer members who weren't around in 08-09, you do not know the true meaning of market correction.

PO

 

[rcknfrewld]

"Of course you would not be able to adjust it "daily" as stated in the info sheet."....PO
couldn't you rebalance thru<1%IFTing everyday......funny I just read that <1%IFT thread 5 times and asked amoeba a question about it

 

[PessOptimist]

Yeah, probably rckn. If you have time.

 

[edfong]

Years after the original discussion, I still believe L2050 is underpriced relative to the older L Funds. Now I believe L2065 and L2060 and L2055 are underpriced relative to L2050. This does not mean the newer L Funds are undervalued. Value and Price are not the same thing just as the stock market and the economy are not the same thing. However, the underlying model behind the L Funds is known by economists as "Efficient Frontier".
This is what was developed by Mercer Consulting. This is what Blackrock manages as the daily NAV for the Board of the TSP. This is what the Board listened to the Aon Consulting when it was argued that L Funds are more conservative in comparision to similar family of products from others like Fidelity and Vanguard. President Trump has introduced politics into the composition of the newer L Funds when he opposed the Board decision to put China into the I Fund. As always, buyer beware and know what you are buying. I argue the TSP Lifecycle funds are related by being all on the save curve as you go out in to the future. All the L funds are related by being on the same curve as you go in toward now L Income. So if you are buying potatoes for tonight's dinner, do you buy individually or in a five pound or ten pound bag? You as a consumer make a choice for what you put in your basket when you go to the market. So not only share price but number of shares does matter. Ultimately, you want your bottom line to be maximized when you start taking distributions for retirement dinners.

 

[nnuut]

https://www.tsp.gov/funds-lifecycle/l-2050/