What the?

[neogenesi]

New guy here, just started putting in a little bit of money into my TSP. I've been in the military for 4 years now, and just started putting in about 7 months ago. I have no idea what I'm doing, but I figured I could at least start putting SOMETHING in and getting used to not having that little bit of money each month.

Like I said I have no idea what I'm doing, I had 100% into the G fund and just recently changed to 50% to L2040, and 50% G fund. Help. What am I doing?

 

[Birchtree]

If I were you I'd try and be more proactive and accumulate some C fund and I fund shares while the pricing remains golden - go with the autopilot system so you can learn before you churn.

 

[Show-me]

neogenesi,

Welcome! The L2040 is a good place to be when you're learning.

 

[nnuut]

PUT ALL YOU CAN AFFORD IN THE TSP! I wish I had, but now I'm at the end of my carrier and can't!! This is the place to learn!!
Norman

 

[Guest2]

Welcome to the community ! L-2040 is a good start. But you also have
50% of your money in the (G) Fund. Are you aware that the L-2040 also
places additional funds in the (G) as well. If not, I'd strongly urge you to
check out the TSP Web Site and become very familiar with the L-Funds.

If you are familiar with the L-Funds and simply wanted a larger percentage
of your money in the (G) Fund, then the L-2010 may satisfy your risk
tolerance alittle closer without giving up the benefits they offer by taking
50% and putting in the (G).

This came from the TSP Website;
"The L Funds are designed so that 100% of your TSP account should be
invested in the single L Fund that most closely matches your time horizon.
Any other use of the L Funds may result in less than optimal returns, a
higher amount of risk in your portfolio, or both."

Once you become familiar with the IFT Limits and the alternative funds,
like the (C),(S) and (I), you might feel more confident in assigning your
own percentages into those funds. But for someone just starting out,
there's nothing wrong with going 100% in a (L) Fund.

 

[JTH]

Wellcome Neo


Don't forget that if you're deployed in a tax free zone, then everything you put into TSP while deployed will stay tax free. Also, if you have an enlistment bonus you can put a percentage (or all of it) into the TSP and that will help jump-start your account.

L2040 is the most aggresive fund, and I beleve that's a good place to start for someone who is just getting started and has time on their side. Technically speaking you are putting in 58% G because L2040 is broken up into the following. http://www.tsp.gov/rates/fundsheet-lfunds.pdf

8% G
10& F
17% S
24% I
41% C



Best of luck

 

[Show-me]

If you're in a tax free zone fund that ROTH IRA!!!

 

[tsptalk]

Welcome neo!

 

[james_smith]

The only fund that's making any money right now is the G fund. That's where your money should be. When that changes, you can shift your money to other funds.

 

[tsptalk]

The only fund that's making any money right now is the G fund. That's where your money should be. When that changes, you can shift your money to other funds.

james - I thought I just read a post from you saying timing doesn't work??

 

[james_smith]

It's true. Market timing doesn't work. What I am talking about is different.

Market timing is trying to predict the tops and bottoms, and then buying at the predicted bottoms and selling at the predicted tops. This doesn't work. So many people are saying that we are at the bottom right now and that it's time to buy. How do they know?

What I am talking about is responding to the market. After a fund has proven itself by having positive returns, you can respond to that and put money in the fund. For some time now, the only fund that has been going up like this is the G Fund. Yes, it's making a pittance. But that's better than losing money in a stock fund.

 

[tsptalk]

It's true. Market timing doesn't work. What I am talking about is different....

What I am talking about is responding to the market. After a fund has proven itself by having positive returns, you can respond to that and put money in the fund. For some time now, the only fund that has been going up like this is the G Fund. Yes, it's making a pittance. But that's better than losing money in a stock fund.

So just go into the G fund when the market is going down, and in the stock funds when they go up, but timing doesn't work?

Kidding... That's what market timing is in my book - as opposed to a buy and hold strategy. Because as you may have heard, "Friends don't let friends buy and hold!"

I think we're on the same page. I thought you had said that we can't predict future market direction. I guess we just have a different definition for timing, but I think we are saying the same thing. Good luck!

Market Timing

 

[james_smith]

You are right. Different people use slightly different language when describing these things. What matters is the concept, not the language.