Rookie question???????

[USMC6056]

I have always been a buy and hold (Dollar Cost Averaging) kind of guy and I have done fairly well lately. I have been 30%-C 30%- S and 40%- I for the last few years. I have been following TSP talk and the narrorator has been calling for a large pull back for weeks if not months now.

My question is what is the best course of action to save some of my gains? I have never played with my allocation so should I re-allocate to bring my dollar amounts back to 30/30/40 or should I protect some of these gains by moving some into the G fund or a combination of the three? Or am I way off base? Thanks for your time.

 

[weatherweenie]

The long story short is, what are you comfortable with?

If you leave your $$ where it is, and there is a 10% correction, would you be ok with that?

If you move to the G fund and the market keeps going up, would you be ok with that?

Do you have the time, access, to make moves in/out of the various funds?

Have you checked out the L funds?

The choice is yours. Do whatever enables you to sleep at night. Good luck.

 

[Birchtree]

When you move funds to the G fund you have to determine how much profit sacrifice you are willing to make by taking money off the table. A disciplined approach would be to remove 1% from each fund as we proceed to new all-time highs on our indexes. That would help you slowly build an insurance policy to help you benefit from the inevitable blind side - but that may not happen for a couple of years, so don't be in any big hurry. The more shares you have working the greater your return. Take care.

Dennis - permabull #1

 

[Brett]

Gosh, if we all knew that, we’d all be rich!! But seriously, there are several factors to consider. The younger you are and more time you have to acquire your nest egg, the more aggressive you should be. If you are close to retiring, you may want to do more to protect the next egg you have built with maybe more funds kept in the “G”-fund.

We all have are own strategies and risk tolerance. Look at the “L” funds and how they have their funds distributed. They are based on when you may want to tap your money; ie 2040. The 2040 has 5% in “G”, and the “L” Income has almost 75% in “G”. Your distribution allocation looks fine.

As to market timing? Hey, do your research, listen to others you respect and then use you gut instinct. Being too greedy is what gets me every time.:notrust: Good luck!!

 

[Show-me]

Risk management. Defends on you time line. If you are nervous or just want to preserve some gains, I would use the ladder approach like Birch suggested. Slowly peel off some gains into the strength.

Have a low risk allocation in mind first in case the market continues to move forward. Nothing worse that being 100% G fund and the market makes another 5, 10, 15%.

Long term I think your OK.

Semper Fi

 

[400K]

I'm in total shock over my last transaction in the TSP. I usually don't move my money around, but on Thursday I did. Moved into a 50/50 split in the S and I. When I looked at the end of the day balance on friday. It was only 11$! I think that I read somewhere that they charge for moving funds around. What happened to my funds? I have been averaging between $500 and $2000 a day profits. I'm confused. I haven't played with my TSP much, just watched the money keep going up but felt that I would do better in the S and I and get rid of the little bit that I had in the G fund. Was that a bad move on my part?

 

[Birchtree]

In the investment arena there are no bad moves - beauty is in the eye of the beholder. But regardless, your portfolio balance will fluctuate but certainly not vanish.

 

[tsptalk]

I have always been a buy and hold (Dollar Cost Averaging) kind of guy and I have done fairly well lately. I have been 30%-C 30%- S and 40%- I for the last few years. I have been following TSP talk and the narrorator has been calling for a large pull back for weeks if not months now.

My question is what is the best course of action to save some of my gains? I have never played with my allocation so should I re-allocate to bring my dollar amounts back to 30/30/40 or should I protect some of these gains by moving some into the G fund or a combination of the three? Or am I way off base? Thanks for your time.

USMC -
Assuming you have at least a few years left, I am still a believer that buy and hold investors should stay the course. I'm not so much looking for a large pullback, I'm looking for a better buying opportunity so I can get into stocks. The future (next year or two) looks bright for stocks.

Tom

 

[azanon]

My question is what is the best course of action to save some of my gains? I have never played with my allocation so should I re-allocate to bring my dollar amounts back to 30/30/40 or should I protect some of these gains by moving some into the G fund or a combination of the three? Or am I way off base? Thanks for your time.

Most buy-and-hold strategists recommend that you do pick some time period where you rebalance your portfolio back to whatever specific percentages you've chosen. Certainly after a few years, you should adjust your percentages in each fund to match your intended target.

If you want a 30/30/40 mix but all you've done so far is had contributions go into each of those 3 funds at that mix, then probably the funds themselves are a ways off from those percentages by now. Just go into tsp.gov and perform an "interfund transfer" setting those funds back to a 30/30/40 mix.

My personal opinion is that markettiming doesn't work so I dont recommend those solutions. The market has been shown to be efficient and reflects accurate pricing on any given day. Further, the majority of fund managers who almost always have 6 digit salaries or more do not even beat the indexes on average over a long period of time. Unless you are more skilled than the average fund manager who does it for a living, i recommend focusing on just saving as much as you can and spending your time with another hobby.

Regarding technical market analysis, one thing i recall from my graduate level statistic course is that you can use statistics to "prove" just about anything if you massage them in just the right way.

 

[mailmanusa]

Two questions you can ask yourself.

1. How much do I want to make?

2. How much can I afford to lose?

How you answer each could depend on how close you are to retirement. No matter where you are the 2nd question is usually the more important one.