Newbie with a few questions...

[captjamied]

Hi all,
I am VERY new to retirement investing...I just landed a government job that lets me contribute to the TSP. I'm 48 years old with 3 years of military service that I am "buying back" for retirement calculation purposes.
I understand the need to try to contribute the maximum $18K/yr. contribution but since I have been out of work for the better part of a year and I have some catching up to do on my credit cards, that is not yet an option. I am putting in what I can right now and have the full 5% agency matching contribution and 1% agency automatic contribution on top of the 7% that comes out of my pay. I know it isn't alot, but I think I can max out my contributions next year AND do the catch-up contributions when I turn 50.
My MAIN question is, what is this "Seasonal Strategy" for fund allocations? I've only heard generalities and nothing very specific.. I assume there are other allocation strategies that I am not aware of, how do those work and what are the advantages/disadvantages of one strategy over the other?
Thanks in advance.
Capt. Jamie

 

[evilanne]

Greetings Capt. Jamie,

There are a variety of different seasonal methods, which basically try to keep you in the market (C/S/I) during months when they do best and in G & F other months, which provide better returns with less risk. I've only been on this site for short time and not sure exactly how their "best month" calculation works works over time. I am not subscribed to any premium service here, so I cannot tell if they have better information than what I have found looking around here. Maybe someone else will be able to give you more info

Best Wishes

 

[tsptalk]

Welcome capt! Seasonal as in, sell in May and go away? You might Google the six month strategy (https://www.google.com/webhp?source...v=2&ie=UTF-8#q=six+month+strategy+sell+in+may).

 

[evilanne]

I'm not sure "Sell in May and go away" is optimal for seasonal strategy, according to Equity Clock » Seasonal Investing this strategy is a myth. There are many factors that do impact the market, so I recommend you learn as much as you can from different resources. With TSP you are limited to 2 unrestricted InterFund Transfers (IFTs) a month, with unlimited moves to the G Fund after any 2 IFTs so some seasonal strategies may not work within TSP given the fund selection.
Sites specifically focused on TSP: TSP Center Seasonal http://*********.com/seasonal.php Business cycle method of investing: TSP Allocation Guide

 

[tom4jean]

I'm no expert but trying to learn all the time. I don't think seasonal investing is a strategy that works anymore. The market reacts very differently these days then it did going back years when seasonal investing developed. The market reacts too much to the Fed, the central banks and world events. I would simply suggest reading through the forums here and learning as much as you can and maybe concider using one of the premium servives available here if you can. I have used 3 different premium services here at different times and have settled on Rev Shark and I have learned a lot just from following their advice and reading what they have to say about the market.

 

[nasa1974]

Hi all,
I am VERY new to retirement investing...I just landed a government job that lets me contribute to the TSP. I'm 48 years old with 3 years of military service that I am "buying back" for retirement calculation purposes.
I understand the need to try to contribute the maximum $18K/yr. contribution but since I have been out of work for the better part of a year and I have some catching up to do on my credit cards, that is not yet an option. I am putting in what I can right now and have the full 5% agency matching contribution and 1% agency automatic contribution on top of the 7% that comes out of my pay. I know it isn't alot, but I think I can max out my contributions next year AND do the catch-up contributions when I turn 50.
My MAIN question is, what is this "Seasonal Strategy" for fund allocations? I've only heard generalities and nothing very specific.. I assume there are other allocation strategies that I am not aware of, how do those work and what are the advantages/disadvantages of one strategy over the other?
Thanks in advance.
Capt. Jamie

Capt. Jamie,

Welcome aboard and thank you for your service.

This is a great place to learn. Ask questions, lots of questions. No one here will tell you what to do but will suggest and make recommendations. The final decision is always yours.

Good friends don't tell friends to Buy and Hold. But that is an option. If that is an option you like I would recommend C, S or I. Your decision on which fund you like best. There are the Premium Services and you can get information on all that are offered through TSPTalk. Or a suggestion would be to start out in one of the L funds, either L-Inc or L2020. The other 3 "L" funds are more aggressive and assuming that you will work another 15 to 20 years for the government it depends on how aggressive you want to get with your money.

Again the final decision is yours alone.

Remember that you only have 2 IFT's a month to move money around in the different funds and everything has to be made before noon EST.

Good luck and keep asking questions.

 

[FogSailing]

Welcome Capt. Jamie. The TSP Talk site is a super place to share ideas on the market and meet some really fine people.

Because I had a tough time in the market over the past 2 years, I decided to subscribe to a premium service. If I had followed all the good advice I'd been given for this crazy year; my return would be around 8%. So I can vouch for the credibility of this approach. If you decide to go it alone you will find some thoughtful and well presented thoughts on the status of the markets by Tom (TSP Talk), Burrocrat, Clester, DreamBoatAnnie, JTH, Bquat, Mr. John Ross, FireWeatherMet, Uptrend, to name a few. However, if you want to set it and forget it until you get a buy or sell signal, I think the premium services are worth your consideration. All the best.

FS