S and I 50/50 re-allocate

[mailmanusa]

I was thinking about a strategy. Put split the money 50/50 S/I. Watch it over the weeks. As they out perform each other alternately, re-allocate back to 50/50.

This way I would always stay in the market for the 20 year long run and continue contributing along the way. The idea by re-allocating periodically is to sell off the better performing one and use it's good fortune to buy up the lower priced shares of the weaker(at the time) one. The goal is to always buy lower and sell higher.

Will a strategy like this work using the S and I funds? Any pointers on how to gauge and manage a plan like this?

How many changes are we restricted to now?

 

[tsptalk]

Hi mmusa -

That is kind of what the L-funds are doing, except they get to reallocate every night.

As of now, you'd be able to reallocate twice per month.

 

[mailmanusa]

Hi mmusa -

That is kind of what the L-funds are doing, except they get to reallocate every night.

As of now, you'd be able to reallocate twice per month.

Does the L-fund re balancing include a strategy that changes according to what happens each day or do they have a set re-allocation process?

If their process is set without paying attention to what is actually happened, it could be harmful, correct?

For instance, if a particular fund out performs the others for several days in a row, wouldn't they have been better off leaving it alone?

This is why I wonder if they actively manage the reallocations or just blindly execute them.

 

[Show-me]

Have not seen you in a while.

It is based on only time and lessens your portfolio risk the closer you get to your retirement date. No active management, set it and forget it approach. If there is a massive sell off the L funds don't care, they are programmed to sell on a predetermined time line.

 

[ballnoutacontrol]

Hey mailman, nice too see you on here, welcome if you are new.

One of the first things to do is go to the TSP homepage and edgucate yourself, spend a few hours searching around find out all the big info that you need to know. Like when and how you can get you money out, max contributions, what markets the funds follow, which one currency play a part in, all the in and out's of IFT's. Stuff like that. Don't mean to push you away, that's just the best way to do it. If you are really interested in managing you TSP you have got to know what is going on and where to find the "hard" info.

As for the L funds, I don't use them. Kind of a gimmic if you ask me. How about giving us something else to invest in. (precious metals, other markets)

One other thing the TSP is really limited as far as what you can invest in, when you can invest and when get you money out(I know it's a retirement account). One might want to check his options before getting too heavily invested in the TSP. There are other places to put your money.


Good luck Brother. Ball'n