Reply to Federal employee, how do you choose your TSP investment?

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[quote=Anonymous][quote=Anonymous]
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.

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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.[/quote]

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