Which L Fund Represents Your Situation?

[Intrepid_Timer]

I've been in the 2030 L-Fund since its inception.

18.37% rate of return during last 12 months.

14.82% since it's inception in August of 2005? Well, at least you've doubled the G fund.................

 

[Globalpack]

Earning 5-6-7-8+% every year over 17 years earns more overall than bargain lower share prices followed by higher price shares 15 years from now.

 

[Intrepid_Timer]

Earning 5-6-7-8+% every year over 17 years earns more overall than bargain lower share prices followed by higher price shares 15 years from now.

I don't understand your reasoning, but if works for you, cool. BTW, your 12-month return has been cut in half, as of last Friday, and the return of the L2030 since it's inception on 08/01/05 is down to 3.81%, which is worse than parking in the G fund. Just because one's balance is higher than it was seven years ago, doesn't mean they are making any money and I don't know anyone who really wants to make 0.50%, on average, every year. Good luck though! I'm sure any year now the S&P 500 will go back to averaging a 10% return every year. Keep the faith......

 

[Globalpack]

I don't understand your reasoning, but if works for you, cool. BTW, your 12-month return has been cut in half, as of last Friday, and the return of the L2030 since it's inception on 08/01/05 is down to 3.81%, which is worse than parking in the G fund. Just because one's balance is higher than it was seven years ago, doesn't mean they are making any money and I don't know anyone who really wants to make 0.50%, on average, every year. Good luck though! I'm sure any year now the S&P 500 will go back to averaging a 10% return every year. Keep the faith......

I was replying to Bullitt's comment where he said ""2030 is almost 17 years away. What you want is for lower prices today and higher prices in 15 years from now."" If share prices fall yes keep buying but my argument is it's PREFERRED for share prices to steadily increase to benefit from compound interest. For example if you start with $100 and, over the course of a year, you earn a 5% rate of return, at the end of the first year, you'll have $105. If you leave that money alone, and the next year you also earn a 5% rate of return, you'll have $110.25 at the end of year two. So, in the second year, you earned 5% on your original $100 contribution and another 5% on the $5 you earned during the first year. At this rate your original investment is doubled in less than 15 years.

 

[Intrepid_Timer]

I was replying to Bullitt's comment where he said ""2030 is almost 17 years away. What you want is for lower prices today and higher prices in 15 years from now."" If share prices fall yes keep buying but my argument is it's PREFERRED for share prices to steadily increase to benefit from compound interest. For example if you start with $100 and, over the course of a year, you earn a 5% rate of return, at the end of the first year, you'll have $105. If you leave that money alone, and the next year you also earn a 5% rate of return, you'll have $110.25 at the end of year two. So, in the second year, you earned 5% on your original $100 contribution and another 5% on the $5 you earned during the first year. At this rate your original investment is doubled in less than 15 years.

Gotcha. 15 years is long time to wait to double one's money though. Plus, one bad year could easily wipe out 5 years of investing. That's what us traders are hoping to avoid.