Pill's Account Talk

[Pill]

Q:
Well I finally got my father to talk to me about their TSP accounts. They have an $80k balance and have been sitting in the G fund for as long as I can remember. Mom and Dad are both retired. 40k each. They are in there 60's and won't need to draw on it for sure until 2010 or longer. I personally would like to take over and manage it myself but he has not given me permission to do so. So I think they should move both accounts into L2010. What are your thoughts? Is it too risky? Not risky enough? I know it all depends on when they will need it. I am sure this is all they have other than their pension. So maximizing is some thing they need. For sure the L2010 would be way better than dying in the G fund. Dad has lost allot in the past so risk is not something he enjoys doing. However in my mind I think its way more risky to be in the G fund and not capitalizing your account.

Advice? Recommendations?? Thanks.

 

[nnuut]

Tough deal handling OPM (other peoples money) If I tried it I surly would lose money for them and feel like a fool!! L2010 is probably a good choice, but if you see a big drop like we had in July move them to the "G" and be a hero. I really know how you must feel.
Norman

 

[Pill]

Thanks Norm for your response.

We all know what we should do most of the time but it sure is nice hearing it from others to confirm.

 

[Pill]

Place an IFT today. Went 40c, 50s, 10i. Waiting to see what happens tomorrow. Bullish for the rest of the year. S fund is looking very good.

I haven't purchased any of the services yet however I plan on going with Ebb and Fred. Knowledge is Power! You have to do the foot work in order to succeed.

I was looking at Tom's Long Term aggressive account, great returns. Buy and hold dollar cost averaging pays off. If you don't know what you are doing this is a great approach. Don't waist you time/money shooting at the hip. But then again thats what I do. Do as I say not as I do. Or atleast thats what management tells me.

 

[Birchtree]

Yes, I believe that friends do let friends buy and hold. I can't complain.

 

[BigGuy]

Yes, I believe that friends do let friends buy and hold. I can't complain.

For the past several years, I had been 50% C and 50% S.

Since February, I've become an obsessive lurker here, and have made about 50 or so IFTs. I am up 9.47% for the year. The 50 C/50S is up 11.07%.

Mike Causey was somewhat correct in noting that few people come back from Las Vegas saying they were losers.

Scott

 

[Pill]

For the past several years, I had been 50% C and 50% S.

Since February, I've become an obsessive lurker here, and have made about 50 or so IFTs. I am up 9.47% for the year. The 50 C/50S is up 11.07%.

Mike Causey was somewhat correct in noting that few people come back from Las Vegas saying they were losers.

Scott

Thanks for another confirmation. Some people just don't like staying put. I have to laugh at some of my co-workers as they think they will miss something by staying put. The numbers speak for itself. I have been lucky enough to move around a little and make a little bit more than I would have staying put. However is it really worth all the time and effort for an additional 2-4%. For me, it is right now, it gives me a hobby. But then again if I wasn't beating the buy and hold it would make more since to go back to it.

 

[Birchtree]

The Birchtree will tell you that staying long requires creativity and accumulating the right facts - so be right and then sit tight. All this bunny hopping around requires constant vigilance. A properly allocated portfolio doesn't need to be rejiggered every time the weather changes. I'll part with these words of wisdom: In order to really learn anything in this game you have to take it on the chin from time to time or be flat run over by the train. You'd be surprised how refreshing that can be - right Sugar?

 

[BigGuy]

Yes, but look how much fun you had following the markets and making all those IFTs! Buy and hold is so boring (just ask Birchtree)...unlike Vegas and TSPTalk where the action is nonstop 24/7. What good is money anyway if you can't play with it and dream of hitting it big?

You are exactly right. It has been a lot of fun making all of the IFTs. I just went back and looked and was somewhat shocked to see that I have made 80 IFTs since the end of March.

I moved the percentages around again today, but I think I am going to stay all in for the remainder of the year.

 

[Birchtree]

Now what if you had to pay an upfront fee of $5.00 everytime you did an IFT? Would that slow you down - some would reconsider and others would continue to roll forward. Now step out into the other world and you could be hit with a $50.00 fee everytime you made a move.

 

[Pill]

No kidding I am looking at opening a brokerage account and trading ETF's with Vanguard and the charge is $20 a trade.

Fees would cause me to trade less!

 

[Pill]

I'm also considering going to a buy-and-hold for about 60% of my account, while keeping the other 40% fluid for DCA opportunities. I'll elaborate more in my account talk once I finalize my strategy.

Thanks Paladin, please do post. I hope it works out great for you!

I have made a few moves since my last post. I am trying to sqeeze the most out of the market I can. I still haven't reached my high since the drop this summer (13%) I am sitting around 10% now. I am thinking bullish and not really concerned about a pull back. I am staying until the end of the year.

Birch, I moved completely out of the C today. Hard to stay when the other funds are out producing. I know your strategy is sound and works but staying put watching the others outperform is tough. History shows the S beats the C during the holidays so why not come play? I do believe the C will take over and out perform the S but don't believe it will happen until next year. Small caps are towards the end of there run.

 

[Birchtree]

Nah, thanks but I'm happy in my manure pile. It's cozy and warm and the wafting is so pleasant. I smell money.

 

[Pill]

In that case, continue to accumulate your shares. I guess when the large caps take off and being that you are accumulation shares then you will pass many of us!

I just can't see that far yet, but I'm learning.

 

[Bullitt]

It's OK to chase bubbles, but just don't be the last to sell. You couldn't catch me dead in Tech. PEP and WMT are only the beginning of what's in store for C Fund.

 

[Mr recognizer]

pill..got your pm..dont know if i can help you as we seem to be diiferent types of investors...your vanguard is parked you know where and my vanguard is 80 stocks and 20% bonds..i hold only the global fund,the international growth fund,the wellington fund, and the total stk market...only 4 funds..as you can see i m a buy and hold kind of guy and am up 13.4% for the year at vg..i can get a better bang for my buck using funds rather than etf's..i m not a trader or timer and i feel thats the route you prefer as per your pm..if i were you i would maintain your allocation to the tsp and i would be at least 85% stocks at your age..but then again your risk tolerance and mine are different...we all have our own appetite for risk..as for your roth if it were mine and i was your age i would be 100% stocks and let it ride...probably 50 internationals and 50 % us...and set it and forget it...but thats just me..all mutual funds also with low expenses..but i bet you already knew that.agin its just your tolerance and appetite for risk but you have 30 years or more on your side...chasing performance may work for some but for most it does not...its all about you..ALLOCATION IS THE KEY..remember this...some investors prefer a total equity portfolio for its superior growth prospects..others invest exclusively in fixed-income instruments,preferring to completely avoid the risks of the stock market..BUT most people seem more comfortable somewhere in between those two extremes...you are the only one who can decide that....gl and know thyself.

 

[Pill]

pill..got your pm..dont know if i can help you as we seem to be diiferent types of investors...your vanguard is parked you know where and my vanguard is 80 stocks and 20% bonds..i hold only the global fund,the international growth fund,the wellington fund, and the total stk market...only 4 funds..as you can see i m a buy and hold kind of guy and am up 13.4% for the year at vg..i can get a better bang for my buck using funds rather than etf's..i m not a trader or timer and i feel thats the route you prefer as per your pm..if i were you i would maintain your allocation to the tsp and i would be at least 85% stocks at your age..but then again your risk tolerance and mine are different...we all have our own appetite for risk..as for your roth if it were mine and i was your age i would be 100% stocks and let it ride...probably 50 internationals and 50 % us...and set it and forget it...but thats just me..all mutual funds also with low expenses..but i bet you already knew that.agin its just your tolerance and appetite for risk but you have 30 years or more on your side...chasing performance may work for some but for most it does not...its all about you..ALLOCATION IS THE KEY..remember this...some investors prefer a total equity portfolio for its superior growth prospects..others invest exclusively in fixed-income instruments,preferring to completely avoid the risks of the stock market..BUT most people seem more comfortable somewhere in between those two extremes...you are the only one who can decide that....gl and know thyself.

Thanks Mr. R- I appreciate your response! I am leaning towards the buy and hold method over ETF's. I find this style of investing works best for me with my knowledge. Howevet ETF's are becomeing popular and seem like a way to make more than the buy and hold, however most do not in my opinion. I was hoping you might have some experience with EFT's. I do like you recommended allocation of 50 Internation and 50 US(large cap). I'll keep you posted on my returns. I just need to find an entry point now. Missing the summer drop was nice however its time to make some gains! Thanks again!

 

[Mr recognizer]

the only thing i see different from an eft and stock is most nothing ...with an etf you have a basket and where as a stock is a stock..you trade them both the same way..commiss in...commiss out anytime of the day..mutual funds i pay no commiss in or out..but have to go in at close of business..etf's usually have a slightly lower expense than mutuals...i view etf's as trading material tho where as a mutual fund u usually hold it longer....dont get me wrong tho as i will drop a mutual fund in a heart beat if it starts mis behaving...i dont hold em all forever....also i think that roth of yours is the best thing going for u along with the 401k.....after being in 5 yrs withdrawals of principal are penalty free so u really dont need no taxable acct's at all..all just my opinion.looking at tracker tho u seem to be playing it just right for your allocations according to your age and u appear very aggressive..you seem well informed...gl

 

[Pill]

Well I got hit with a 4% loss the other day trying to bob and weave. Price to pay moving 100%. I have to laugh at myself as I think I have a plan and then I change oh so fast. I really wish I would have stayed diversified and just played with say 40%. That seems to work best for me. Say 20% in C S and I and move the other 40% as I see fit. I do see getting all the loses back within a few weeks. I am extremely optimistic and see the S fund leading the way through the holidays based on seasonal charts. I would be surprised to see the I fund beat the S in Nov. and Dec. So I plan to ride S and I through a majority of it and will be looking to enter the C fund early next year.

I still haven’t decided what to do with my ROTH IRA's at Vanguard. I have been in a money market every since the drop this summer (I missed it). I was considering starting ETF's however I think just putting it in mutual funds are best for me. I am looking at Energy, International and Large Caps.

As a not seasoned investor please follow at your own risk, and of course I am always open for suggestions! Good luck to every one.

 

[Spaf]

Pill,
Depending on your strategy! If you move funds around, mutual funds will get mad at ya! Their prospectus discourages "trading"! On the other hand ETF's can be traded frequently. Just understand how ETF funds "settle" and "free rides".
A few other items: Check the Expense Ratio on mutuals, and understand the bid vs ask price on ETF's.
Spaf