I just hate that I don't understand the graphs that much, I mean I get the buy low sell high idea, but how does one use graphs from past data to judge what tomorrow brings
. I saw something that showed what day of the month stocks usually bring and yesterday I believe it was like 40% in the green or something lol and we know what happen there.
im thinking about keeping mine in this 70 g and 30 in other funds until we have another few days in the red then I guess try my luck at going 70/80 percent in the S or I. Hate to lose though even though I have years and years to go. I have to relax when I lose a few hundred lol if I was to jump all in and lose a grand or more I probably would take some vacation time lol.
There are many factors that you should use to decide your risk appetite. How old are you? How long till you retire and will need the money? etc.
If you are young and have many years (2 decades or more) left you will be better off if you keep more money in stocks. Buy and hold, just having a certain amount of every paycheck go into a stock fund and never looking back, will do well for you in the long run. But, here on TSP Talk we try to examine what the market is telling us, and move to safety when the seas ahead are looking rougher. If you can skip the biggest market disasters you will perform better than if you buy and hold. There are some very smart people here that can help a lot. Tom, who runs this site, has a great write-up every day. JTH posts several times per day. There are others, too. I, myself, am much better off for having lurked around here for several years.
Here's an example of what I'm talking about...
Let's say its October 2007 and the market has just hit all-time highs and your acct now has $500,000. Over the next 6 months the economic news is very sour and the market sags 20%. You just lost $100,000 in 6 months. The bad signs are everywhere so you move to the G Fund. By the time its Sept/Oct 2008 the market is incredibly volatile, losing and gaining 10% on single days. You're now glad you are in the G Fund. In March of 2009 the market hits its generational low, losing roughly 57% since the high in Oct 2007. If you had stayed in you would have $215,000 instead of $400,000. All of a sudden losing $100,000 doesn't seem that bad! If you had jumped in the market near that low point and held until now (just 6 years) your $400,000 would now be roughly $1,200,000. That's an ideal example of timing ONLY the biggest events and making very few moves, and ignoring the day-to-day roller coaster aspects of the market. Nobody ever nails things perfectly, of course.
In the same example if you had never exited the market and just rode out the crash you would still have roughly $667,000. That's still more than if you had put everything in the G fund at the Oct 2007 high and were too fearful to ever re-enter the market. Did anyone move to the G Fund in Oct 2007 and fully move back into stocks in March 2009? That would be ideal, but I seriously doubt anyone nailed it that well. Personally, unfounded fear is the reason that I kept moving back into the G fund in 2009 and 2010 and ended up with negative returns in major up years - a big regret of mine!
You have to be in it to win it. Nothing ventured, nothing gained, and so on. There will be a time in the future when we hit a long-term top and don't return that high for many years. A long-term bear market still has profit opportunities, but market-timing is more important. Its helpful to watch many things at once - the big economic picture, technicals, fundamentals, and other world events. I've found that the riskiest time for the market is ahead of and entering into a recession. Watch the news because there will be many signals as we approach such a stretch.
