Preserve TSP Account during downturn

[whereislotus]

Hello, I'm asking for some suggestions on how to preserve my TSP account. I am 35 and have another 30 years until I retire. My contributions are the following:

C Fund 30%, S Fund 15%, I Fund 55%

I have XXXX in the I Fund, XXXX in the S Fund, I have XXXX in the C fund, and XXXX in the G.

I'm trying to search the web for suggestions on how to balance my account to handle the downturn in the economy. Does anyone recommend that I change my contributions or recommend I do an intra fund transfer?

I appreciate any suggestions you may have to help protect my retirement.

thanks

 

[felixthecat]

A very good question which I have encountered before such as the 2001 and 2002 downturn in the market. In that time, I did play it safe and stayed mostly safe in the G and F fund. I found windows of opportunity to briefly get small profits, but I did not ever shoot for the fence. I wasn't able to time market rises and falls during this volatile time. I still cannot do it. Therefore, I play it safe until the market has set a firm bottom and I wait a few months for sideway action so as to confirm the bottom. I will most certainly miss a bit going up but that is okay when the maket is down 15 to 20 percent. For a long termer like ourselves, we can afford to wait to preserve the money. So, here I wait to see if we have bottomed. I expect same volatility over the next couple of months and then we should have a good outlook going forward. Cross our fingers.

My opinion and please don't trade on any information I provide. I'm looking for guidance as well so I just have past performance to depend on. Past performance doesn't necessarily mean similar future performance.

 

[rokid]

Hello, I'm asking for some suggestions on how to preserve my TSP account. I am 35 and have another 30 years until I retire. My contributions are the following:

C Fund 30%, S Fund 15%, I Fund 55%

I have ... in the I Fund, ... in the S Fund, I have ... in the C fund, and ... in the G.

I'm trying to search the web for suggestions on how to balance my account to handle the downturn in the economy. Does anyone recommend that I change my contributions or recommend I do an intra fund transfer?

I appreciate any suggestions you may have to help protect my retirement.

thanks

I wouldn't do anything yet. However, I do think you need an investment philosophy to get you through this market turmoil.

Go here and ask your question:
http://www.diehards.org/forum/viewforum.php?f=1

In addition, pick up the The Bogleheads' Guide to Investing. The paperback edition sells for less than $12 on Amazon. The authors frequently post to the Diehards message board. Also, "Laura", who is a Fed, is more than happy to provide TSP fund allocation advice.

Take a look at TSPTalk's Longer Term Fund Allocation section.

Finally, the TSP Board has set up the L Funds as the state-of-the-art investing approach for retirement. You could move to the L2040 and only take a small hit on your stocks to get up to the ~ 17% fixed income (G&F) allocation. However, once you're in the L Fund, you don't have to worry about it anymore. You'll be set for the next 30 years of investing.

Good luck.-----Jim

 

[whereislotus]

Thanks everyone, I appreciate your time to respond to my post and will follow your suggestions.

 

[whereislotus]

Hello all, thanks for responding to my post. I've been listening to Bob Chapman from the International Forcaster and listened to the audio file of The Second Great Depression: Starting 2007, Ending 2020 by Warren Brussee an interview on Financial Sense Newshour March 2006. It got me thinking about preserving my retirement if there is a depression. Has anyone listend to Warren Brussee? Should we be in I-Bonds, TIPS, gold, or silver? If you visit the Financial Sense Newshour web site you should be able to listen to the mp3 file.

 

[felixthecat]

Very interesting audio on the coming depression. For sure it will happen, but I do not know the time nor do I have confidence anybody else does. I will add this to my archive and keep a close on world events leading up to the start.

 

[Spaf]

What a screw up!

Preserving TSP accounts during a downturn is a big TSP screw up!...:embarrest:

If you are not retired, then any new allocations should be going to the G-fund. Was this ever mentioned by TSP? I don't think so!!....:notrust:

If you are retired, then any deductions should be from the G-fund! No!..TSP takes it from all funds! They are taking money from reduced share value. Why can't we send a IFT to have funds taken from the G-fund?.....

 

[CountryBoy]

What a screw up!

Preserving TSP accounts during a downturn is a big TSP screw up!...:embarrest:

If you are not retired, then any new allocations should be going to the G-fund. Was this ever mentioned by TSP? I don't think so!!....:notrust:

If you are retired, then any deductions should be from the G-fund! No!..TSP takes it from all funds! They are taking money from reduced share value. Why can't we send a IFT to have funds taken from the G-fund?.....

Spaf,

I'm confused about one of your points. I'm not retired and I'm having my current paycheck allocations placed 80%C and 20%I to take advantage of the lower share cost, since I've pretty much sit in G this year. Am I being thick skulled? I can understand why the should take G fund money for retirees, during a downturn. What am I missing?

Thanks,
CB

 

[Spaf]

CB,

I'm a trader, not a B&H'er.
Allocating to stocks is putting $ in a very volatile market. Where is the low? Will You loose $? The market in the current crisis is too uncertain.
MHO, put it in the G-fund (Capital Preservation) and buy (trade) when the crisis is over an a up-trend is established.

Spaf,

I'm confused about one of your points. I'm not retired and I'm having my current paycheck allocations placed 80%C and 20%I to take advantage of the lower share cost, since I've pretty much sit in G this year. Am I being thick skulled? I can understand why the should take G fund money for retirees, during a downturn. What am I missing?

Thanks,
CB

 

[CountryBoy]

CB,

I'm a trader, not a B&H'er.
Allocating to stocks is putting $ in a very volatile market. Where is the low? Will You loose $? The market in the current crisis is too uncertain.
MHO, put it in the G-fund (Capital Preservation) and buy (trade) when the crisis is over an a up-trend is established.

Thanks Spaf,

That makes perfect sense, I didn't even consider that, and I can understand your frustration. It seems the TSP nimrods do all they can to handcuff us.

CB

 

[Rod]

My payday contribution always always always gets allocated to the (G) Fund.

Then I allocate it out from there, at my convenience.

I sure hope everyone is doing it this way, because what if your payday contribution happens to be "deposited" into the market on a bad day???

If so, then there goes your payday allocation!

DOUBLE CHECK THOSE CONTRIBUTION ALLOCATIONS!!!

 

[SteveTSP]

Rod,
After many years doing allocations into a constant distribution across the stock funds, I finally changed mine to 100% G fund yesterday afternoon. I am really worried that the real bottom is still ahead in the near term. Thanks for your thoughts, Steve

 

[Caldonia]

My payday contribution always always always gets allocated to the (G) Fund.

Then I allocate it out from there, at my convenience.

I sure hope everyone is doing it this way, because what if your payday contribution happens to be "deposited" into the market on a bad day???

If so, then there goes your payday allocation!

DOUBLE CHECK THOSE CONTRIBUTION ALLOCATIONS!!!

Wow. Thanks for making that really clear, Rod.

I wish I had read it before noon Friday, although I did put more into G from my contribution allocation, but not enough. I had it 100% G for years, but had changed it to spread across the board and only 20% G after trying to decipher what was the best method after reading on the board here. I've been reading back threads, but this is the first time I am understanding much better why G is the safest, as far as when pay contribution is deposited. Possibly more bad timing as I also jacked up my contribution % amount the last 2 pay periods...

I'll put it back to G, or mostly G. Useful information but so far I am acting too late, opposite, with my tsp account transactions; or just out of synch with the larger system.

 

[EW_ret]

I agree you need to preserve assets, but that time was earlier this year. Personally, I thought the big downturn was coming last year, but I was wrong. I lightened up in stocks by 20% the end of last year, and have 35% in stocks and 32% in cash now. I am buying stock funds slowly, getting lower prices. I've taken losses, but that is part of the investing for the long haul.

The best way is invest contributions into the TSP equity funds, or L funds. Be greedy when others are fearful, while prices are low. In the long run the "buy low" approach will always win out. NOW IS THE TIME TO BUY, NOT SELL. You do this by putting new money into the stock funds, not the G fund.

 

[eccougar]

I agree 100% with EW. With 30 year until retirement, you can buy shares every 2 weeks, while the price of shares are down and if markets continues going down that will allow you to pick up more shares each payday.

 

[jimijr]

When I rebalanced last week, I wound up buying a thousand shares of C-fund (for example) for $10+ that I had sold in June for $16+. This improved the cost-basis for the whole portfolio.

 

[8_percent]

My payday contribution always always always gets allocated to the (G) Fund.

Then I allocate it out from there, at my convenience.

I sure hope everyone is doing it this way, because what if your payday contribution happens to be "deposited" into the market on a bad day???

If so, then there goes your payday allocation!

DOUBLE CHECK THOSE CONTRIBUTION ALLOCATIONS!!!

Rod or others,

This is interesting and sounds like it makes sense, but I'm trying to visualize it. Can you or others go a little more in detail as to why this is a wise technique?

 

[nnuut]

8 percent, I think it's a good idea to have your contributions going to the "G" because you can use the $ in the "G" to DCA into the Market at the appropriate time, buy low. If you notice that the market is trending upward and the indicators are over bought that is the time to sell (depending) not to buy. It's a great tool to have that money in cash and buy at the best time.

 

[FUTURESTRADER]

During a downturn, yes into G with contributions, if you can identify the downturn. It's still a matter of timing. I currently spread my contribution across all the equity funds and L funds. It works out to about .03% each into the 8 funds, allowing me to 'Squalebear up' , unlimited IFTs<1%, +.97% into each fund , about 6% into equities after I've used my 2 monthly IFTs.

 

[gonefishin]

What about changing allocation based on current trend. No limit on that. yet?