Should I have more allocated to bonds to take advantage of drops in the market?

[jeep364]

I am 100% in L 2050. I have only been contributing a few years and try to maximize my contribution. I like the set it and forget it aspect of the Lifecycle funds.

However, I am willing to dabble a bit more. Should I be contributing say 10% to the G fund so I can take advantage of large market drops? I know in the long run buying and holding is fine (maybe not on this section of the forum, but I digress)

This would allow me to have some play money to throw at the C and S fund if there is a large percentage drop over a few days...The downside is of course, I am missing out on gains.

I understand I can make 2 fund transfers (with the 3rd going to money market only) per month, so obviously I won't be doing this daily.

 

[rothnroll]

I am 100% in L 2050. I have only been contributing a few years and try to maximize my contribution. I like the set it and forget it aspect of the Lifecycle funds.

However, I am willing to dabble a bit more. Should I be contributing say 10% to the G fund so I can take advantage of large market drops? I know in the long run buying and holding is fine (maybe not on this section of the forum, but I digress)

This would allow me to have some play money to throw at the C and S fund if there is a large percentage drop over a few days...The downside is of course, I am missing out on gains.

I understand I can make 2 fund transfers (with the 3rd going to money market only) per month, so obviously I won't be doing this daily.

If you are retiring in the year 2050, I would suggest being 100% in C and S funds.

 

[99percent]

I am 100% in L 2050. I have only been contributing a few years and try to maximize my contribution. I like the set it and forget it aspect of the Lifecycle funds.

However, I am willing to dabble a bit more. Should I be contributing say 10% to the G fund so I can take advantage of large market drops? I know in the long run buying and holding is fine (maybe not on this section of the forum, but I digress)

This would allow me to have some play money to throw at the C and S fund if there is a large percentage drop over a few days...The downside is of course, I am missing out on gains.

I understand I can make 2 fund transfers (with the 3rd going to money market only) per month, so obviously I won't be doing this daily.

Never a bad idea to have some cash on reserve for a short term play. My opinion. But that's called "timing"

 

[jeep364]

Never a bad idea to have some cash on reserve for a short term play. My opinion. But that's called "timing"

Of course, it's basically gambling in the end. Is this a downside to target funds? It provides some diversification between funds but doesn't let you move money within it. If I had separate funds broken down according to the life cycle breakdown, then I could move money directly to s or c.


Can someone confirm for me the tsp fund transfer policy? Am I only allowed two 'transactions' so to speak per month? ie I want to transfer smaller amounts money from my g fund to c fund, I am only allowed to do it twice per month with no other transactions?
EDIT: You can make an IFT at any time, but there are some important limitations:

• The first two IFTs of any calendar month may redistribute money in your account among any or all of the TSP funds, including moving your entire balance into the Government Securities Investment (G) Fund.
• Subsequent IFTs in the same calendar month can only move money into the Government Securities Investment (G) Fund

 

[nasa1974]

Of course, it's basically gambling in the end. Is this a downside to target funds? It provides some diversification between funds but doesn't let you move money within it. If I had separate funds broken down according to the life cycle breakdown, then I could move money directly to s or c.


Can someone confirm for me the tsp fund transfer policy? Am I only allowed two 'transactions' so to speak per month? ie I want to transfer smaller amounts money from my g fund to c fund, I am only allowed to do it twice per month with no other transactions?
EDIT: You can make an IFT at any time, but there are some important limitations:

• The first two IFTs of any calendar month may redistribute money in your account among any or all of the TSP funds, including moving your entire balance into the Government Securities Investment (G) Fund.
• Subsequent IFTs in the same calendar month can only move money into the Government Securities Investment (G) Fund

The edited version is correct on monthly IFT's (Interfund Transfers). My understanding of the "L" funds is that your money is distributed in different percentages to all the funds and the percentages are weighted according to which "L" fund you are in. The L2020 will be weighted more towards the "G" and "F" funds (lower risk) vs. the L2050 which would be weighted more towards the "C" and "S" funds (more risk). The fund percentages would be similar whether you have 50% or 100% in the L2050 fund let's say. You could create your own L2050 fund by putting specific percentages in the G,F,C,S&I funds and then using your monthly IFT's to move some of that money around. You could also keep a specific percentage in the L2050 fund (i.e. 75%) and have the balance in the C,S or I fund. Then you could move this 25% in and out of those funds but still maintain the larger balance in the L2050 fund.

These are just examples to show that you have control over your TSP account and you can do whatever you want with your retirement fund. You just have to be comfortable with what you are doing. We all have good years and bad. The biggest thing that you can do is learn as much as you can so you can make good decisions with you money. Don't be reckless but don't be afraid either.

 

[nnuut]

Good Timing is easier said than done!

 

[Boghie]

Jeep,

You already have a little over 10% in the 'G Fund'. Do you really want more? If you are young enough to invest in the L2050 than in my opinion you should hold NO 'G Fund'. If you are not young enough to invest in the L2050 than you are market timing - which is great, but watch the market.

In no case should you purchase G/F with contributions. You want to fully Dollar Cost Average contributions - and you hope and pray for a crash if a big chuck of your assets are coming in via DCA. If you want to hold a higher percentage in the 'G Fund' like some ancient retired geezer (just joking geezers) than use an IFT to get it there. Do not use your contributions. You should only contribute to C/S/I - unless (see, I am a one armed paper hanger) you are a very good chartist market timer type.