Question about mixing L funds with G,F,C,S,I

[bjean]

I notice a few of the members allocating a percentage in each fund available including the L funds. What is the advantage to mixing the L funds with regular funds?

 

[tsptalk]

I don't see any advantage. The L-funds were created for TSP participants who want to take more of a buy and hold approach based on the number of years they had left to work. If someone trades them or mixes them with the other funds, it seems to be a futile attempt to do something. I'm just not sure what.

 

[Boghie]

I notice a few of the members allocating a percentage in each fund available including the L funds. What is the advantage to mixing the L funds with regular funds?

Bararajean,

For me, the only reason I did it was to give myself some holdings in the equities funds (C/S/I) that would automatically reallocate every night.

Then, as the month went on I moved assets out of the L2010 into C/S/I to increase the potential gain. The holdings in the other L funds were to increase the amount of C/S/I and give me something to implement '<1%' IFT transactions into. I had made my final full IFT early in the month. Most folks here use the 'G Fund' in the way I just mentioned. Just trying something new.

 

[Silverbird]

oops, misunderstood the question. I don't mix them myself, too confusing

 

[RunningFool]

By the way welcome to you Barbarajean, good to see a fellow Arkansan.

 

[bjean]

thanks for the replies, i discovered this site last month, and it is a highlight of my day to read the comments. I have over 30 years working for the fed and hope to retire in 2 years. I am following ruffryder's allocations, thank god 40 % of it is in G fund after what the stock market did today.

 

[tsptalk]

i discovered this site last month, and it is a highlight of my day to read the comments.

You are the 2nd person to say that today (1 via email). That means a lot to me. Thanks!

 

[Bullitt]

Just remember Barbarajean, capital preservation is key and there is no such thing as a holy grail when it comes to investing. There is much to learn on this MB.

 

[Viva_La_Migra]

Bararajean,

For me, the only reason I did it was to give myself some holdings in the equities funds (C/S/I) that would automatically reallocate every night.

Then, as the month went on I moved assets out of the L2010 into C/S/I to increase the potential gain. The holdings in the other L funds were to increase the amount of C/S/I and give me something to implement '<1%' IFT transactions into. I had made my final full IFT early in the month. Most folks here use the 'G Fund' in the way I just mentioned. Just trying something new.

Let us know how it works for you Boghie.

 

[burrocrat]

What is the advantage to mixing the L funds with regular funds?

when i first started to active manage my tsp allocations i would keep 50% in the L2040 and play with the other half. i thought it would be useful to see how my performance stacked up against the Ron Popiel method - set it and forget it.

thought it might give me some protection if i messed up bad, and maybe confirm my personal strategery was more profitable before i struck out all on my own.

but it got too confusing changing percentages all the time and i ended up not keeping the original 50% 2040 intact, so there went the value of comparison.

turns out i'm not as great an investor as i thought, would've done better hiding under the 'G' rock most of the time.

but i'm learning.

 

[crws]

thanks for the replies, i discovered this site last month, and it is a highlight of my day to read the comments. I have over 30 years working for the fed and hope to retire in 2 years. I am following ruffryder's allocations, thank god 40 % of it is in G fund after what the stock market did today.

IMHO...
With 2 years to go, I would have the wagons circled against all comers, and as many posts on this board attest, they are always coming for your $$.
I'd suggest starting a thread polling "how many years to go vs. risk exposure" and maybe get a better idea of how folks closer to the door are allocated. From all I've read about today's market turbulence, nobody really knows which way the market is going to go, other than 2 years is a short time to be on a clear path.
Just 2 years ago we were deep in the toilet and a quick scan of the last 10 years' TSP returns shows G, and to a lesser degree F, as the leaders of the capital preservation goal like Bullitt emphasized. I have 10 left to go, and after the housing values debacle, I am guarding what I have like a hawk. Preservation would be my game 2 years before I would no longer contribute.
Good Luck!

 

[nnuut]

Welcome to the Message Board Bararajean.
Best of luck
Norman

 

[Boghie]

Just remember Barbarajean, capital preservation is key and there is no such thing as a holy grail when it comes to investing. There is much to learn on this MB.

Gotta concur with Bullitt.

Rather than trying to grow your TSP holdings I would be setting up my retirement.

1. Figure how much you will need (gross) in annual income during retirement.
2. Add your pension to your Social Security
3. Subtract that from your requirement (what you need from TSP)
4. And, place 7 years of that differential (inflation adjusted) into G.
5. Then, invest the rest in F/C/S/I - that is the only investable assets you have.

Even better, invest a bit in a real planner like Ric Edelman and Ray Lucia. Their books and radio shows are awesome. I'm certain their advice would be even better.

 

[Bullitt]

I've been thinking and I just can't get this out of my head.

You are at a phase in your life when you have to understand the substantial risks involved in speculation. A bullish tide can make a rusty nail look like a rose. Most timers who have been bullish since March 09 have been bailed out excessively from this maniacally bullish tsunami of speculative paper that has been thrown into the market.

If someone who is in their 20's goes to Casino Aladdin, aka, Scottrade, aka, the stock market and blows a great deal of the money, it's not that big of a deal because in theory they still have peak earning years to look forward to when they can really sock the savings away.

When the money in savings is blown a few years before it's time for one to start living off it, they will almost always try to compensate by adding risk at a time when the risk outweighs the rewards.

The reason I bring this up is because I have been pounding my fist on the table on this MB and the Blog about how this administration is forcing the savers into speculating in the stock market since yields are at all time lows. The reason for this is deflation, which is a story for another post, but everybody from pensions to the individual investor is playing a dangerous game of "Tech Bubble Deux" as they gamble money in a market that has one stock, Citigroup, accounting for 20% of the volume in a basket of 500 different stocks (S&P 500).

This MB has a lot to learn from. I hate to say it, but the odds of somebody developing a great system are about the odds of making it to the Big Leagues or NFL. Most systems eventually go up in smoke.

 

[poolman]

I've been thinking and I just can't get this out of my head.

You are at a phase in your life when you have to understand the substantial risks involved in speculation. A bullish tide can make a rusty nail look like a rose. Most timers who have been bullish since March 09 have been bailed out excessively from this maniacally bullish tsunami of speculative paper that has been thrown into the market.

If someone who is in their 20's goes to Casino Aladdin, aka, Scottrade, aka, the stock market and blows a great deal of the money, it's not that big of a deal because in theory they still have peak earning years to look forward to when they can really sock the savings away.

When the money in savings is blown a few years before it's time for one to start living off it, they will almost always try to compensate by adding risk at a time when the risk outweighs the rewards.

The reason I bring this up is because I have been pounding my fist on the table on this MB and the Blog about how this administration is forcing the savers into speculating in the stock market since yields are at all time lows. The reason for this is deflation, which is a story for another post, but everybody from pensions to the individual investor is playing a dangerous game of "Tech Bubble Deux" as they gamble money in a market that has one stock, Citigroup, accounting for 20% of the volume in a basket of 500 different stocks (S&P 500).

This MB has a lot to learn from. I hate to say it, but the odds of somebody developing a great system are about the odds of making it to the Big Leagues or NFL. Most systems eventually go up in smoke.

This is very true Bullit,

It takes Nerves Of Steel to trade even your TSP in this market.

My Strategy has been mostly news driven. We have some very severe problems in the World right now that has been a culmination of decades to why we are where we are now.

I think at this point we could wake up one morning where the Dow Futures are down over 1000 points.

That is where my head is at now.

Peace...

 

[Scribbler]

I've been thinking and I just can't get this out of my head.

You are at a phase in your life when you have to understand the substantial risks involved in speculation. A bullish tide can make a rusty nail look like a rose. Most timers who have been bullish since March 09 have been bailed out excessively from this maniacally bullish tsunami of speculative paper that has been thrown into the market.

If someone who is in their 20's goes to Casino Aladdin, aka, Scottrade, aka, the stock market and blows a great deal of the money, it's not that big of a deal because in theory they still have peak earning years to look forward to when they can really sock the savings away.

When the money in savings is blown a few years before it's time for one to start living off it, they will almost always try to compensate by adding risk at a time when the risk outweighs the rewards.

The reason I bring this up is because I have been pounding my fist on the table on this MB and the Blog about how this administration is forcing the savers into speculating in the stock market since yields are at all time lows. The reason for this is deflation, which is a story for another post, but everybody from pensions to the individual investor is playing a dangerous game of "Tech Bubble Deux" as they gamble money in a market that has one stock, Citigroup, accounting for 20% of the volume in a basket of 500 different stocks (S&P 500).

This MB has a lot to learn from. I hate to say it, but the odds of somebody developing a great system are about the odds of making it to the Big Leagues or NFL. Most systems eventually go up in smoke.

Bullitt,

You are one of the very few people who "get it." Unfortunately, I see many people who are absolutely certain that they can "get out" prior to any calamity. History shows that this is not a likely outcome.

Ken

 

[CountryBoy]

I've wanted to jump into the market more than the few times I have, but have resisted the urge.

With the market being manipulated by things (government, computer models, people) out of my control, this thread has given me the additional patience I need to conserve my funds and remain in the G.

I can utilize my stock market acumen, :laugh: with a few stocks in our 2 ROTHS.

Excellent thread.

CB

 

[SWAVET]

I notice a few of the members allocating a percentage in each fund available including the L funds. What is the advantage to mixing the L funds with regular funds?

I attended Mid-career retirement session as they said try to rebalance my account every six months and recommend to allocation in the L-Funds. I did tried to buy & hold and keep at least 25% in L2040 for numerous of years. Although I was lucky enough to gain 12%+/annually, but it is not worth it if I be able to avoid all the lost from stocks from buy and hold if I keep it moving it around including the G-Fund. See the following two examples if both start out at $100,000:

Example1: gained 22% in 2008, gained 10% in 2009 and 10% in 2010. = Average 14%/yr.

Example2: lost 34% in 2008, gained 55% in 2009 and 24% in 2010 = Average 15%/yr.

At the end of the 3 yrs, example1 balance is $147,620 and example2 balance is $126,852.

For this reason, I’ll stay always from L funds as much as possible. Doesn't matter whether it is bear or bull and my goal is try to gain at least 1% month (anything extra are bonus & cover for other month(s)) and I think I can do it with all the pro especially Tom and Coolhand and news on this MB . By the way the perentage in example2 for 2008 and 2009 (24% 2010 are based on my 12 month return) are my TSP (buy & hold) as I was lucky enough to gain all my lost back +$10K at the end of 2009 by contributions additional money to TSP.

 

[Frixxxx]

I attended Mid-career retirement session as they said try to rebalance my account every six months and recommend to allocation in the L-Funds. I did tried to buy & hold and keep at least 25% in L2040 for numerous of years. Although I was lucky enough to gain 12%+/annually, but it is not worth it if I be able to avoid all the lost from stocks from buy and hold if I keep it moving it around including the G-Fund. See the following two examples if both start out at $100,000:

Example1: gained 22% in 2008, gained 10% in 2009 and 10% in 2010. = Average 14%/yr.

Example2: lost 34% in 2008, gained 55% in 2009 and 24% in 2010 = Average 15%/yr.

At the end of the 3 yrs, example1 balance is $147,620 and example2 balance is $126,852.

For this reason, I’ll stay always from L funds as much as possible. Doesn't matter whether it is bear or bull and my goal is try to gain at least 1% month (anything extra are bonus & cover for other month(s)) and I think I can do it with all the pro especially Tom and Coolhand and news on this MB . By the way the perentage in example2 for 2008 and 2009 (24% 2010 are based on my 12 month return) are my TSP (buy & hold) as I was lucky enough to gain all my lost back +$10K at the end of 2009 by contributions additional money to TSP.

L Funds are for those who have no interest to track their investments. Problem with them is they are "automatically" adjusted on time scales rather than a performance scale. Your goal may not meet up with their time frame...... Sounds like you're and expert like your mentors now! Good Job!

 

[JTH]

For this reason, I’ll stay always from L funds as much as possible. Doesn't matter whether it is bear or bull and my goal is try to gain at least 1% month (anything extra are bonus & cover for other month(s)) and I think I can do it with all the pro especially Tom and Coolhand and news on this MB . By the way the perentage in example2 for 2008 and 2009 (24% 2010 are based on my 12 month return) are my TSP (buy & hold) as I was lucky enough to gain all my lost back +$10K at the end of 2009 by contributions additional money to TSP.

Great post, and I happen to believe 8-12% a year is a very respectable number. If you can combine this with avoiding the Bear markets, you have a great long-term investment plan.