Federal employee, how do you choose your TSP investment?

[Anonymous]

Anonymous wrote:
2008 won't happen again unless you're expecting another real estate crash nationwide. I got really lucky because we took a 50k loan for a house right before the crash. Sometimes it's better to be lucky than good.

So if I took a loan 5-6 times as large just before the '08 dive, am I 5-6 times as lucky as you?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:NP. I think PP meant FERS.

Yes I was talking about the FERS annuity. When I retire I'll get 42% which is actually close to 50% since there are no payroll taxes out of it. Then there is social security. That's 2 separate fixed income retirements. The idea that I would be using the G fund seems a bit out there. I can survive the drops in the market. I won't need to withdrawal at retirement anyway.

Just as a real-world example ... by heeding an advisory recommendation to move things out of equity funds prior to the '08 dive, we averted a loss of approx. $170-200k in our TSP account had we left it fully in equities.

With the growth in the account from '09-14, it was up more than $250k in that period. Losing approx., say, 30% of the growth of $180k plus the actual loss of the $180k that was averted, that is $200k that is in our account today because there was a reallocation to about 55%G in '08 before the big dive. That's the difference between a $800k TSP balance and a $550k balance = real money to most people.

So it can make a significant difference. I've been retired for 2 yrs. and won't have to touch the TSP account for years and have other assets so for us it's not so critical, but if your TSP account performance matters, as it does to many, many people, going all in on equities and just riding it out is a proven less than optimal (to put it mildly) way to go.

Well, now you are talking about timing the market rather than choosing an investment allocation. If you think you can time the market and move in and out of stocks and bonds to make more money, fine. But for everyone who gets this right there is someone who gets this wrong - every buyer has a seller. Many people who went into bonds when the market crashed missed out on the recovery.

No, you're wrong there. You again describe something that is not what I'm describing.

Every method of allocation is "market timing" in some way but I reject the common perception of moving around frequently to time the market.
What I'm talking about is the model I mentioned above, see tsppilot.com (again, I have no affiliation other than as a paying customer who's done well enough in 15 yrs with my TSP account to retire at 58), which makes infrequent adjustments based on an analysis model that has worked over time (contrary to any "market timing" claim I've ever seen).

You may call that "market timing" -- but it's nothing like any market timing model I've seen. In the larger sense it is "market timing" just as any decision, including choosing to hold no G fund, etc., is a "market timing" call. The only way any of us never engages in market timing is to select one allocation model, set it & forget it. That's a pretty weak investment strategy, as time has proven.

Oh god I love the fake disclaimer. You totally work for them. I'm not visiting that site and I hope no one else does. Instead of giving vague explanations with promised results, why not just explain the whole thing? You don't work for the site right? Right? RIGHT?

[Anonymous]

Anonymous wrote:

Anonymous wrote:
2008 won't happen again unless you're expecting another real estate crash nationwide. I got really lucky because we took a 50k loan for a house right before the crash. Sometimes it's better to be lucky than good.

So if I took a loan 5-6 times as large just before the '08 dive, am I 5-6 times as lucky as you?

50k is the max allowed by the law....

That means yours is a withdrawal and you're not paying it back at market lows...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:NP. I think PP meant FERS.

Yes I was talking about the FERS annuity. When I retire I'll get 42% which is actually close to 50% since there are no payroll taxes out of it. Then there is social security. That's 2 separate fixed income retirements. The idea that I would be using the G fund seems a bit out there. I can survive the drops in the market. I won't need to withdrawal at retirement anyway.

Just as a real-world example ... by heeding an advisory recommendation to move things out of equity funds prior to the '08 dive, we averted a loss of approx. $170-200k in our TSP account had we left it fully in equities.

With the growth in the account from '09-14, it was up more than $250k in that period. Losing approx., say, 30% of the growth of $180k plus the actual loss of the $180k that was averted, that is $200k that is in our account today because there was a reallocation to about 55%G in '08 before the big dive. That's the difference between a $800k TSP balance and a $550k balance = real money to most people.

So it can make a significant difference. I've been retired for 2 yrs. and won't have to touch the TSP account for years and have other assets so for us it's not so critical, but if your TSP account performance matters, as it does to many, many people, going all in on equities and just riding it out is a proven less than optimal (to put it mildly) way to go.

Well, now you are talking about timing the market rather than choosing an investment allocation. If you think you can time the market and move in and out of stocks and bonds to make more money, fine. But for everyone who gets this right there is someone who gets this wrong - every buyer has a seller. Many people who went into bonds when the market crashed missed out on the recovery.

No, you're wrong there. You again describe something that is not what I'm describing.

Every method of allocation is "market timing" in some way but I reject the common perception of moving around frequently to time the market.
What I'm talking about is the model I mentioned above, see tsppilot.com (again, I have no affiliation other than as a paying customer who's done well enough in 15 yrs with my TSP account to retire at 58), which makes infrequent adjustments based on an analysis model that has worked over time (contrary to any "market timing" claim I've ever seen).

You may call that "market timing" -- but it's nothing like any market timing model I've seen. In the larger sense it is "market timing" just as any decision, including choosing to hold no G fund, etc., is a "market timing" call. The only way any of us never engages in market timing is to select one allocation model, set it & forget it. That's a pretty weak investment strategy, as time has proven.

Oh god I love the fake disclaimer. You totally work for them. I'm not visiting that site and I hope no one else does. Instead of giving vague explanations with promised results, why not just explain the whole thing? You don't work for the site right? Right? RIGHT?

LOL, Mr. or Ms. Know It All,

In fact, I do not work for them, never have, I just pay them whatever the annual subscription cost is, I read the advisories, I take the advice or not as I choose (mostly do).

But thanks for your snark, it's very entertaining to read as you sit there cluelessly looking for a reason to up the snark.

I know it's probably hard for you to latch on to the concept that someone might actually have success and be willing to pass on some information to others. But go ahead, stay in your L Fund heaven if you want. Good luck.

[Anonymous]

Anonymous wrote:
Oh god I love the fake disclaimer. You totally work for them. I'm not visiting that site and I hope no one else does. Instead of giving vague explanations with promised results, why not just explain the whole thing? You don't work for the site right? Right? RIGHT?

I don't see any promised results at all, just an explanation of how it has worked - an analytically based system to time reallocation based on specifically described analysis which I'm not going to repeat for you here...

For those too lazy to do any research on your own, fine, ignorance may be your bliss.

"I'm not going to visit that site and I hope no one else does." --- you sound like a petulant 5 year old.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
2008 won't happen again unless you're expecting another real estate crash nationwide. I got really lucky because we took a 50k loan for a house right before the crash. Sometimes it's better to be lucky than good.

So if I took a loan 5-6 times as large just before the '08 dive, am I 5-6 times as lucky as you?

50k is the max allowed by the law....

That means yours is a withdrawal and you're not paying it back at market lows...

Oh, you mean you took a TSP loan?

Oy ... no thanks. Don't need that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Well, now you are talking about timing the market rather than choosing an investment allocation. If you think you can time the market and move in and out of stocks and bonds to make more money, fine. But for everyone who gets this right there is someone who gets this wrong - every buyer has a seller. Many people who went into bonds when the market crashed missed out on the recovery.

No, you're wrong there. You again describe something that is not what I'm describing.

Every method of allocation is "market timing" in some way but I reject the common perception of moving around frequently to time the market.
What I'm talking about is the model I mentioned above, see tsppilot.com (again, I have no affiliation other than as a paying customer who's done well enough in 15 yrs with my TSP account to retire at 58), which makes infrequent adjustments based on an analysis model that has worked over time (contrary to any "market timing" claim I've ever seen).

You may call that "market timing" -- but it's nothing like any market timing model I've seen. In the larger sense it is "market timing" just as any decision, including choosing to hold no G fund, etc., is a "market timing" call. The only way any of us never engages in market timing is to select one allocation model, set it & forget it. That's a pretty weak investment strategy, as time has proven.

Market timing is moving between asset classes on the basis of your assessment of market conditions. That is clearly what you are doing - it is not about how frequently you do it.

The only alternative is not to select one allocation and never change it - it could also be to have a pre-determined strategy based on your age and which may incorporate rebalancing.

See the attached on market timing:
http://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy#Never_try_to_time_the_market_.28Rule_.235.29

[Anonymous]

TSP Pilot is market timing-- not sure how you think "an analytically based system to time reallocation based on specifically described analysis" is not gobbledygook for "market timing."

I'm happy it worked for you (if it did) but that doesn't mean I'm going to trust them with my money. If they really could do it predictably they'd be hedge fund billionaires, not making a few bucks asking feds for subscription fees.

[Anonymous]

Anonymous wrote:TSP Pilot is market timing-- not sure how you think "an analytically based system to time reallocation based on specifically described analysis" is not gobbledygook for "market timing."

I'm happy it worked for you (if it did) but that doesn't mean I'm going to trust them with my money. If they really could do it predictably they'd be hedge fund billionaires, not making a few bucks asking feds for subscription fees.

It's not really one or the other. Anyone could see 2008 coming, maybe not the exact day or month, but knew it was soon. I did and I was just reading some real estate blogs.

[Anonymous]

Anonymous wrote:
Market timing is moving between asset classes on the basis of your assessment of market conditions. That is clearly what you are doing - it is not about how frequently you do it.

The only alternative is not to select one allocation and never change it - it could also be to have a pre-determined strategy based on your age and which may incorporate rebalancing.

[...]

I use it as part of a pre-determined strategy based on age that includes rebalancing. It just so happens, however, that their allocations over the past 10 yrs. or so have lined up with the general pre-determined strategy and have helped fine tune it - the one significant diversion was to accelerate reducing equity allocations just before things crashed in '08, which more than halved the loss of a more conventionally-allocated portfolio ... so it's worked out just fine - retired 4-6 years early with far bigger gains and balances than planned for.

I have issues with all target date-oriented funds like the L Funds, if you look from family to family among investment firms, their allocations are all over the map for the same time horizon. So you don't really get away from having to do your own homework, they foster the illusion that there's one magical allocation for each target date. There isn't when you compare them so you still have to decide which one fits, and you have to keep up with their own internal re-balancing (market timing being done inside these target-date funds) to see if you still agree with them.

For the snark-butts who want to accuse me of shilling for another company with which I have no affiliation other than as a paying subscriber, take a look, for ex., at the Vanguard Advisor if you own Vanguard funds. The premise that just owning a few index funds is a good way to go is attractive (I've done it myself for years). Unfortunately index funds can get pounded in down markets. The Advisor looks at actively managed funds that have a good chance of beating the similar index funds. Not saying buy the publication, just opening some thought (for those not in the "I won't look at it and no one else should" mindset) about an alternative that can provide information on which you may or may not want to allocate your portfolio. There, too, on the ones I've chosen to go with, the result has been greater returns than via the index funds and especially less downside.

YMMV. Please hold your snark because I don't work for them, so neither they nor I give a shit if you feel snarky towards someone just sharing some information with others FWIW.

[Anonymous]

Anonymous wrote:TSP Pilot is market timing-- not sure how you think "an analytically based system to time reallocation based on specifically described analysis" is not gobbledygook for "market timing."

I'm happy it worked for you (if it did) but that doesn't mean I'm going to trust them with my money. If they really could do it predictably they'd be hedge fund billionaires, not making a few bucks asking feds for subscription fees.

You assume that the latter is their goal.

It clearly appears not to be. Not everyone is as greedy as you apparently suspect.

[Anonymous]

Anonymous wrote:

Anonymous wrote:TSP Pilot is market timing-- not sure how you think "an analytically based system to time reallocation based on specifically described analysis" is not gobbledygook for "market timing."

I'm happy it worked for you (if it did) but that doesn't mean I'm going to trust them with my money. If they really could do it predictably they'd be hedge fund billionaires, not making a few bucks asking feds for subscription fees.

It's not really one or the other. Anyone could see 2008 coming, maybe not the exact day or month, but knew it was soon. I did and I was just reading some real estate blogs.

Since you were good then, what will happen next year?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:TSP Pilot is market timing-- not sure how you think "an analytically based system to time reallocation based on specifically described analysis" is not gobbledygook for "market timing."

I'm happy it worked for you (if it did) but that doesn't mean I'm going to trust them with my money. If they really could do it predictably they'd be hedge fund billionaires, not making a few bucks asking feds for subscription fees.

It's not really one or the other. Anyone could see 2008 coming, maybe not the exact day or month, but knew it was soon. I did and I was just reading some real estate blogs.

Since you were good then, what will happen next year?

It won't be 2008. No mortgage crisis, no credit freeze threatening the global economy.

[Anonymous]

100% C - all stock, 650k saved 15 years to go.

[Anonymous]

Anonymous wrote:

No, you're wrong there. You again describe something that is not what I'm describing.

Every method of allocation is "market timing" in some way but I reject the common perception of moving around frequently to time the market.
What I'm talking about is the model I mentioned above, see tsppilot.com (again, I have no affiliation other than as a paying customer who's done well enough in 15 yrs with my TSP account to retire at 58), which makes infrequent adjustments based on an analysis model that has worked over time (contrary to any "market timing" claim I've ever seen).

You may call that "market timing" -- but it's nothing like any market timing model I've seen. In the larger sense it is "market timing" just as any decision, including choosing to hold no G fund, etc., is a "market timing" call. The only way any of us never engages in market timing is to select one allocation model, set it & forget it. That's a pretty weak investment strategy, as time has proven.

Um, NO. TSP newbies, don't believe this! Spend 5 minutes googling market timing.