Squalebear's Account Talk

[Guest2]

This could mean absolutely nothing, however, hope is still hope !
Last week on 4/30/08 the (I) Fund and (F) Funds were the only
two funds up for the day (don't know about the L Funds).

Today is looking like deja vue. As of 2:30pm the Funds are
estimated (without any FV calculation) as follows:

F = +.02
C = -.08
S = -.05
I = +.07

The next day, the C & S Funds jumped significantly higher
(1.72% and 1.43%) respectively. It will be interesting to
see if this quirk happens again. Heck the I Fund could end
unchanged from what I've seen. But like I said in a recent
entry, the deficit holds at 0.11 Tsp cents and could go
either way. :worried:

 

[Guest2]

Come on Baby, Give daddy back some of that .11 cents you owe me. :blink:

 

[Guest2]

Come on Baby, Give daddy back some of that .11 cents you owe me. :blink:

What can I say, +.03 TSP Cents over and above the +.04 TSP Cents
earned today is still sweet. Especially since the I-Fund outperformed
all the other Funds combined.

I hoped for the G-Penny early, I was blessed.
I hoped for an Outperformance in the I-Fund, I got lucky.
Now for the +1% gains in the USM for Tuesday, Could It Be So ?

The deficit is in single digit territory (0.08 TSP Cent). The fund tends to
add to the deficit the day after single digits are hit. So we really need a
boom from the USM to drive up the I-Fund enough to allow for a good
return on Tuesday within the I-Fund. If the US Market is weak or left
unchanged, the I-Fund will likely take a bigger hit then what they gave
to us today. I expect the deficit to rise into the mid teens. This equates
to approximately .07 tsp cents or .29% less then the EFA performance.
But if the EFA closes up +1.29%, I'll take the 1% I-Fund return any day.

I'm 100% in the I-Fund for Tuesday and plan to stay there for now.
But, if my guts starts to twitch before noon, anything is possible.
I've used 1 IFT so far in May and I feel the burn of being limited.

To quote Clint Eastwood (Magnum Force 1973)
"A MAN HAS GOT TO KNOW HIS LIMITATIONS"
To quote Clint Eastwood (Sudden Impact 1983)
"GO AHEAD, MAKE MY DAY"

 

[luv2read]

It ain't over yet. I guess $2 a share is the going rate for banks going under. Wonder if Ben will step in to save this deal too? BSC set a precedent; Countrywide is the largest mortgage lender in the US, Ben would have a hard time justifying NOT saving this deal after bailing out BSC and handing it to JPM.

Countrywide off, as analyst sees deal woe
By Greg Morcroft, MarketWatch
Last update: 4:16 p.m. EDT May 5, 2008
NEW YORK (MarketWatch) -- Shares of Countrywide Financial Corp. fell more than 10% on Monday after an analyst called on Bank of America Corp. to scuttle plans to buy the nation's largest mortgage lender because of the falling value of its loan portfolio. Short of abandoning the deal outright, Bank of America is almost certain to cut its offer price for Countrywide to as low to $2 a share, from the initial agreement to pay $7 a share, said analyst Paul Miller Jr., of FBR Capital Markets.

"Bank of America should completely walk away from the Countrywide deal, as CFC's loan portfolio will prove a drag on earnings and could force BAC to raise additional capital," the analyst wrote in a research note to clients.
Countrywide's stock closed the session down 62 cents to $5.36. Bank of America shed more than 2% to $38.97.

In the broader market, the Financial Select Sector SPDR , an exchange-traded fund that tracks the financial stocks in the S&P 500, fell 1.6%.
Bank of America could face $20 billion to $30 billion in write-downs of Countrywide's mortgage loans pending completion of a deal for the troubled mortgage lender, according to Miller. See full story.
Meanwhile, shares of American Capital Strategies fell 7% Monday.

Analysts at UBS cut their rating on the company's shares to sell on Monday. UBS said the firm may face big write-downs to some of its investments in order to meet new accounting standards.

The report said American Capital Strategies has not yet adjusted the value of some of the loans it carries on its books, and that under the new accounting rule, called Statement of Financial Accounting Standards No. 157, it will likely have to.

"Traditionally, American Capital has considered the cost (entry) basis in valuing recent investments. In this context, we think that ACAS has more downside risk to net asset value as compared to its peer group," the analysts said.

 

[Guest2]

Take away the Mortgage Crisis and Financial woes for 2008 and we'd be
sipping champagne right now.

Europe is taking a dump and I see nothing in sight to off set the doom &
gloom of today. Maybe I'll get lucky enough (on a down day) to see the
deficit skyrocket into the 20's (0.20 tsp cents). On a down day, the EFA
would closed down, but the I-Fund would close with a much smaller lose.

In all the years that I have carried a mortgage, CFC beat all the others
(hands down) in Customer Service. At this juncture, that means squat.

Remember, markets don't go straight up and they don't go straight down.
So I'll be sitting and watching to see if it's wise to make my 2nd IFT into
the USM vs. the OSM by twelve noon. If a move happens, I must keep in
mind that I can only move those funds back into the G from there. If the
2nd move went 100% G, I'd be stuck there until June 1st, 2008.

 

[luv2read]

don't forget about the L funds as a possible interim move - some but not all.

 

[airlift]

luv2read,
I've never used the L funds and don't know how to use them in. How are the percentage of stocks v. bonds balanced, and how do you play this? Thank you.

don't forget about the L funds as a possible interim move - some but not all.

 

[Frixxxx]

luv2read,
I've never used the L funds and don't know how to use them in. How are the percentage of stocks v. bonds balanced, and how do you play this? Thank you.

Just checkout the fund distribution on:

http://tsp.gov/rates/fundsheet-lfunds.pdf

The pictures show the distribution between G,F,C,S,I

Now, with that, you can look at all those individual fund sheets to see what they're invested in. "L" funds are a way to set and forget your retirement. Play it safe or risk it!

 

[Birchtree]

The L fundfs are basically for the uninformed or investing public that is not prepared to invest on their own. The L funds provide diversification and therefore less risk. If you want to make good money in TSP you need to concentrate your holdings where you can make $40,000 per point in a particular fund.

 

[Guest2]

Go to this TSP link: http://www.tsp.gov/lifecycle/flash/index2020.html
Play with the clock until you reach April 2008 or July 2008. You'll find
(in the case for L-2020) the estimated allocations the fund will divide
your money into. DCA'ing out of the L-Fund back to the G would move
a portion of your money out of all funds (gains and loses) without the
ability to control each of the funds individually.

I could allocate my money based on the same percentages, then DCA
back into the G without touching every fund all at once. It sounds like
the L-Fund would not give me the freedom I desire.

 

[luv2read]

luv2read,
I've never used the L funds and don't know how to use them in. How are the percentage of stocks v. bonds balanced, and how do you play this? Thank you.

TSP.GOV has pie charts that show the fund distribution within each of the L funds.

The L Funds diversify participant accounts among the G, F, C, S, and I Funds, using professionally determined investment mixes (allocations) that are tailored to different time horizons. The L Funds are rebalanced to their target allocations each business day. The investment mix of each fund adjusts quarterly to more conservative investments as the fund’s time horizon shortens.

L income is safest with 74% in the G fund. You can't rebalance within the L fund you choose, Barclays does that each day to maintain the target allocations of each fund in the L fund. ​

I've used L income just to pull back from stocks and keep a little in. I've also used it to test the waters on an upswing before jumping all the way in.

If I was currently in stocks and worried about it, but not ready to get out completely or didn't have time to figure out percentages, I'd consider going to L 2020 or L income for my next move. Then if the market worsened I'd probably DCA into G fund, or go 100% G if it really tanked.

Example of DCA into G:

5/5/08 50%C/25%S/25%I > 100% L 2020

5/15/08 100%L 2020 > 90% L 2020/10% G

5/25/08 90%L 2020/10%G > 50% L 2020/50% G

5/30/08 50% L 2020/50% G >100% G

Which leaves me positioned in G fund ready to make my first IFT of June back into stocks - or into an L fund to test the waters. I don't particularly like the L funds simply because FRTIB is pushing them down our throats and I believe we should have the freedom to choose where and when we invest our money. However, they might be a handy lily pad if you're undecided about which way to jump with your 2 unrestricted IFT's.

 

[XL-entLady]

According to the latest Thrift Fund information I have, here are the breakouts between the funds. As to how to play it, I'm looking forward to seeing what folks say!

Income is 74% G, 6% F, 12% C, 3% S, 5% I.
2010 is 52, 7, 22, 7, 12 percent respectively.
2020 is 30, 8, 33, 11, 18.
2030 is 18, 9, 37, 15, 21.
2040 is 7, 10, 41, 18, 24.

 

[Guest2]

Birchtree is absolutely correct. The L-Funds are set up for "LONG TERM"
investment. I never touch them. The daily rebalacing of the L-Funds will
not help the short term investor. Can you still get gains, of coarse you
can ! But to take 8% of my money out of an L-Fund and add it to the G,
equates to me taking out 2% out of the F,C,S and I. Maybe I don't want
to touch the money in the S & I Funds, With the L-Fund, I have no choice.

 

[Guest2]

As we're writing, the I Fund is off it's lows at -.10%
So is the S Fund -.22%,,,,, Can we see some buying
this afternoon? Still early yet !

 

[Buster]

As far as C & S...I don't think we've seen the end of the down turn period yet..maybe end of this week or beginning of next before it starts telling us to buy again.

 

[luv2read]

I agree with Squalebear and Birchtree who are far more knowledgeable than I am about investing. L funds are primarily for long term investing or for someone who can't make up their mind on percentages. However, I've successfully used the L funds when I didn't have time to figure out exact percentages or when I was too cowardly to jump in or out all the way - when we had daily IFT's. I still see them as a way to incrementally increase G fund while maintaining an interest in stocks.

 

[DCguy]

First, the tech market, then the housing market, and now the oil.. I'm going to G and will stay in G til oil price drops..

 

[luv2read]

Oil bubble? Bleh! Gives me gas....

looks like more money going into I fund....

 

[Guest2]

I agree with Squalebear and Birchtree who are far more knowledgeable than I am about investing. L funds are primarily for long term investing or for someone who can't make up their mind on percentages. However, I've successfully used the L funds them when I didn't have time to figure out exact percentages or when I was too cowardly to jump in or out all the way - when we had daily IFT's. I still see them as a way to incrementally increase G fund while maintaining an interest in stocks.

I'm sure your not alone Luv2read, my best friend does the same thing.
But I would suggest using the percentage information to stroke your need
and eliminate your indecisiveness, then go do an IFT with the same %'s
into the individual funds. You will allow yourself the opportunity to run
into the G-Fund (unlimited) should you desire. It's all about Freedom of
Choice, while being careful not to lock yourself in during a crash.

p.s. Remember to read my signature, you give me too much credit :embarrest:
Even if it makes me feel good to hear such a kind thought :embarrest:

 

[luv2read]

I'm sure your not alone Luv2read, my best friend does the same thing.
But I would suggest using the percentage information to stroke your need
and eliminate your indecisiveness, then go do an IFT with the same %'s
into the individual funds. You will allow yourself the opportunity to run
into the G-Fund (unlimited) should you desire. It's all about Freedom of
Choice, while being careful not to lock yourself in during a crash.

p.s. Remember to read my signature, you give me too much credit :embarrest:
Even if it makes me feel good to hear such a kind thought :embarrest:

I've done that too....used the L fund percentages for an IFT into the individual funds. And I agree with you that it gives more freedom and is probably a better choice.

LOL! You deserve the credit for reminding me of the above....and for your March returns!