No, not really. The "buy high and sell low" phenomenon happens primarily because of poor timing on the part of unsophisticated investors. They see things going down, try to get out, but sell too LATE. By the time they have sold it is at or near the bottom. Then the converse happens when they see things going up. They try to buy in to catch the rising tide, but again they buy too LATE, so end up getting the market at or near the peak.
The hypothetical that you present that one would be "selling low and locking in losses by selling S or C now and buying G", is based on an assumption that the market is low, and not fully yet recovered from the minor downturn of a month ago. Further, it assumes that S and C will have significant growth in the future (rather than declines) and that one would miss out on that growth if he had his money in G. I think both of those assumptions to be false. If S and C shed 40% of their value, then one would be glad to have had his money in G and not experience those declines.. A 20% to 40% decline in corporate common (with makes up S & C) is what most analysts are predicting.
It is not helpful to discuss only what happened over the past 60 days (from Jan 29 to now). That is an incredibly narrow space of time to look at. If you look at the past 8 years you will see that the market has had an over 8 year, uninterrupted bull run. The stock market is WAY TOO EXPENSIVE right now. Almost every commentator and analyst that you care to look up feels that way.
When stocks are expensive and dramatically overpriced they have just one direction to go. DOWN. And that could happen in hours or even minutes. The question is do you get out now and lock in your profits while the market is high, or wait until the selloff is underway then frantically try to get out and be the one who "sold near the bottom" due to the fact that TSP trades don't execute until the end of the trading day?
From: TSP_Strategy@yahoogroups.com [mailto:TSP_Strategy@
yahoogroups.com ]
Sent: Sunday, March 11, 2018 3:05 PM
To: TSP_Strategy@yahoogroups.com
Subject: Re: [TSP_Strategy] Why I fund
The buy high and sell low mostly comes from those who panic during a downturn and go 100% back to G, which is what you would be doing if you go back to G at this point (assuming you've been in equities since at least Jan 26). The market is still down a bit from the volatility we've been going through since Jan 29. If you go to G now, you'll lock in your losses. I don't know what funds you're in but the C is still down 2.7%, S is down 1% and the I Fund is down 5.7% from the Jan 26 closing prices.
It doesn't sound like a lot but for one who is 100% in C Fund with a $300k account balance (for example), going to G would be like throwing $8,000 in a fire.
Mike
On Sun, Mar 11, 2018 at 10:11 AM, 'steve_thompson777' steve_thompson777@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
Significant analysis was done after the 2009 meltdown. It found that those with self directed TSP accounts did exactly the wrong thing at exactly the wrong time. They bought high and sold low. A lot of people made a ton of money on financially unsophisticated TSP account holders.
I am simply saying that for this one, one would be wise to get in front of it. Sell while the market is at historic highs. The buy after it has fallen down to historic lows (and I mean 1929 style historic lows).
From: TSP_Strategy@yahoogroups.com [mailto:TSP_Strategy@yahoogrou
ps.com ]
Sent: Saturday, March 10, 2018 11:22 PM
To: tsp_strategy@yahoogroups.com
Subject: Re: [TSP_Strategy] Why I fund
But that's how this works... have you not seen any major index chart since we started recording this early in the 20th century?!!
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From: TSP_Strategy@yahoogroups.com <TSP_Strategy@yahoogroups.com> on behalf of 'steve_thompson777' steve_thompson777@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com>
Sent: Saturday, March 10, 2018 11:05:46 PM
To: TSP_Strategy@yahoogroups.com
Subject: RE: [TSP_Strategy] Why I fund
I guess that is true. It is all just a matter of time. No matter how far your stocks go down, I guess if you hold them for 100 years they will eventually come back. Unless the company files for bankruptcy that is.
I would rather not ride along with a massive downturn, but to each his own.
From: TSP_Strategy@yahoogroups.com [mailto:TSP_Strategy@yahoogrou
ps.com ]
Sent: Saturday, March 10, 2018 7:07 PM
To: TSP_Strategy@yahoogroups.com
Subject: RE: [TSP_Strategy] Why I fund
Been in stock funds almost constant for 30 years and never lost a dime, only sellers loose. Even if the shares
went down, they have never failed to go back up.
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From: TSP_Strategy@yahoogroups.com <TSP_Strategy@yahoogroups.com> on behalf of 'steve_thompson777' steve_thompson777@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com>
Sent: Saturday, March 10, 2018 7:02:24 PM
To: TSP_Strategy@yahoogroups.com
Subject: RE: [TSP_Strategy] Why I fund
I had no idea Jim. I think of G as a place to simply not lose money. Like stuffing cash under your mattress. I had no idea that you could actually achieve appreciation from G.
We think that we are insulated when we buy into C and S, but we are not. They are nothing more than an amalgam of class C common purchases strategically. When the larger market goes down, guess what? So do they!!!
I am totally invested in I, per Sarah's advice, but the less appreciation I see, and the more threat I see in the market, the more I wish I was in G….
Good tidings and investing to all….
From: TSP_Strategy@yahoogroups.com [mailto:TSP_Strategy@yahoogrou
ps.com ]
Sent: Saturday, March 10, 2018 2:49 PM
To: TSP_Strategy@yahoogroups.com
Subject: Re: [TSP_Strategy] Why I fund
Interesting fact - Over the last 7 week period (from Friday 19 January through Friday 9 March) the best performing TSP Fund was ... the G Fund. Check me on that at
http://tspcenter.com/tspReturn
s.php and enter the dates for yourself.
Of course if you choose time periods carefully enough, you can get just about any fund to come out on top.
Not that I agree with those analysts Steve referred to earlier in this thread who think there is going to be a 40% correction in the next 12-18 months (like there was 10 years ago). But if you are one who does, then you'd want to be 100% G from now until then, right?
If there is such a large correction in the next year and a half, wouldn't it take more than a 40% gain by another TSP fund somewhere during that period just to come close to matching the performance of the lowly G Fund (that chugs along at about +2% per year; higher in periods of rising interest rates like now)?
Jim
On Sat, Mar 10, 2018 at 2:35 PM, 'steve_thompson777' steve_thompson777@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
OMG. That is amazing. Not me. I don't even know if I will LIVE for 30 more years. Much less wait 30 years to come back from a downturn.
Good luck to you. If I can protect my assets from a downturn I will surely do it.
Don't say that JP Morgan's President (and Bill Gates) didn't warn you.
From: TSP_Strategy@yahoogroups.com [mailto:TSP_Strategy@yahoogrou
ps.com ]
Sent: Saturday, March 10, 2018 2:27 PM
To: tsp_strategy@yahoogroups.com
Subject: Re: [TSP_Strategy] Why I fund
From: TSP_Strategy@yahoogroups.com <TSP_Strategy@yahoogroups.com> on behalf of 'steve_thompson777' steve_thompson777@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com>
Sent: Saturday, March 10, 2018 1:24:56 PM
To: TSP_Strategy@yahoogroups.com
Subject: RE: [TSP_Strategy] Why I fund
That is a generic statement that would apply to a normal market. The concern is that this is an outlandishly abnormal market. It has done nothing but go UP consistently for the past 8 years. Almost everybody in the world considers it to be dramatically overvalued.
If one is a gambler and willing to weather a 10 year downturn then yes, stay in US based common stocks (C, S, etc.). Just be aware that when the "correction" does happen it could take as long as 10 years to get you back to where you were before the correction.
I bought a house in Las Vegas in 2007. By 2009 it had shed over 60% of it's value. (I mailed the bank back their key.) There are those in Las Vegas STILL waiting for their homes to get back to where they were before 2009.
Being old and having lived through the Housing bubble, the Dot com bubble, the Telecom bubble, etc., I have a special appreciation for overinflated, unsustainable bubbles. The US stock market over the past 8 years appears to be just that.
Buyer beware…. You have been warned. Some on the inside (Gates, Buffett, Soros) have been kind enough to raise warning bells to the unshaven masses. (Generally they keep that information to themselves.)
If you are willing to wait 10 years to get back to having as much money as you have today, then by all means be a "long term investor" and stay in. If you are not, try to "time the market", get out before it crashes, then when it crashes "buy the dip".
As I said, I am only treading water in I fund. I could tread water every bit as well in G, but with NO risk.
Many think we have another October 29, 1929 coming in the next 12 to 24 month.
Comments, thoughts, and healthy debate are always welcomed.
Thanks,
Steve.
From: TSP_Strategy@yahoogroups.com [mailto:TSP_Strategy@yahoogrou
ps.com ]
Sent: Saturday, March 10, 2018 12:21 PM
To: tsp_strategy@yahoogroups.com; tsp_strategy@yahoogroups.com
Subject: Re: [TSP_Strategy] Why I fund
No. Go to the G fund if your risk tolerance is this low.
From: TSP_Strategy@yahoogroups.com <TSP_Strategy@yahoogroups.com> on behalf of 'steve_thompson777' steve_thompson777@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com>
Sent: Saturday, March 10, 2018 10:49:23 AM
To: TSP_Strategy@yahoogroups.com
Subject: RE: [TSP_Strategy] Why I fund
Is anybody ready to freak out, seek shelter, and dump everything in G???
Several of the top analysts in the world have called for a 40% "correction" in US based common stock over the next 12 to 18 months….
I followed Sarah and dumped everything into I, but I have done nothing but treaded water there. I can tread water in G, and the risk of capital loss goes to almost zero.
From: TSP_Strategy@yahoogroups.com [mailto:TSP_Strategy@yahoogrou
ps.com ]
Sent: Saturday, March 10, 2018 10:11 AM
To: TSP_Strategy@yahoogroups.com
Subject: Re: [TSP_Strategy] Why I fund
Good Morning- Has anyone received any emails from Sally? I haven't seen any from her for awhile and wondering if somehow I got dropped off of the group?
Sent from my iPad
On Mar 10, 2018, at 10:06 AM, mikestacyboomer@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
Where is everyone? I fund is still my preference long term, but for the past few weeks I have been split between C/S/I. Just putting that out for conversation.
I have no technical analysis to justify this move, other than momentum. I will reconsider again at the end of the month. It has been a rough ride the last two months.
..
Posted by: Mike VanAmburgh <mjv325@gmail.com>
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