I'm going out on a limb here - as I don't often reply to the various messages in this group.
Using my own experiences and examples (all hard learned) I offer the following:
Currently, I'm 100% in the S with my contribution buying the I and timed (when S is down) buying more S with an interfund transfer from I.
Before when I was foolish - I would try to time the market - watching as the dips occurred and tempting fate by shifting out of the riskier funds to G when "I thought" the market was taking a serious move downward.
I place emphasis on the error and for good reason. In the 100+ times I tried to make this work for me - for all but one of those I managed to catch the swing down at its low and didn't get back in fast enough to recover my losses. Having tracked all of my moves and the TSP very carefully for the last 15 years - I can tell you with absolute confidence - I'll do the same stupid thing again out of fear.
Fear that I'm missing out of an opportunity to nab that shift down and add to my balance when it starts to recover.
Fear that this is the big one and if I don't get out now - my balance is never going to recover
Fear that ultimately, I won't have enough to live on when I move into full time retirement.
It has been said many times on this groups emails and it has been repeated so many more times in financial advisories, blogs and bulletins - stocks are not short term investments. The investor who works the long term side will always have a greater chance at success than anyone who does the short term moves to "get ahead" of where they are faster than the market would provide using the long term policies.
With my balance currently floating around $350K - I've suffered so many set backs between last year and this that I've finally convinced myself last week not to over react and just leave it alone. That decision saved me this time around as my day of reconning was last Thursday when I nearly made the leap yet again - only to watch the rapid recovery this week - which I would have missed at least part of had I made the move like I had in the past.
I've spilled my guts here to illuminate one sound thought - though - I'm sure to faulter....
If you plan on beating the market by taking advantage of short term shifts and timing your sells/purchases to coincide with the highs and lows respectively - I'd rethink that greed/fear motivation out of your strategy book and commit to the longer slower (perceived) gains that come from long term investing.
If you plan on beating the market by taking advantage of short term shifts and timing your sells/purchases to coincide with the highs and lows respectively - I'd rethink that greed/fear motivation out of your strategy book and commit to the longer slower (perceived) gains that come from long term investing.
With all of those shifts and sells/purchases that I tried to beat the market on - My total losses have amounted to more than $100K over the last 15 years as opposed to hitting it perfectly one time and gaining a whopping $17,230. I would be solidly $83K better off in my TSP, have more free time as I would no longer be in panic / greed mode trying to time everything by researching every angle I could find and ohhh - yeah the really great benefit - that $100K would have me just $50K short of my retirement goal of 1/2 a Mil - $500K in my TSP at retirement.
The process of reasoning and valid support mechanisms for the market shifting around as it does has gone the way of the dodo. Markets are moving more on the basis of fear and perception - by the masses who are invested and their connection to the internet. Emotion is more the driving force and no one can predict that with enough accuracy to be able to make the moves at Noon Eastern that would be sustained through the rest of the trading period on any day. Want proof of that - just look at the market histories - many massive shifts in both directions occurred after our daily deadline to commit to a purchase/move in the TSP. Those last three hours are literally cataclysmic.
Although I never have fully understood why we are restricted to buy/sell before Noon Eastern - the fact that we can't make changes all the way up to the bell means we're subject to any number of influences either way that can and have had major impacts on the investments we're allowed to access. That coupled with the limited two buys other than a final G fund buy and your options are really limited on how to do any kind of timing and come out ahead. Sure the TSP administrative costs are tremendously lower than any other investment program - I wonder just how much difference it would make on the investors and the market if our access to the market were allowed to participate up to the bell - not limited so much as it is now.
There are some potentials - as this group has revealed numerous times (like last August 31 when I should have sold S) which appear to help avoid huge losses - but even those don't always result in the expected outcomes. With the S dropping more than 25% (over a $13 swing down 24 Dec from its high in Aug 31). Swinging back up to less than 5% down in April to back more than 10% down again May 31/June 03, and back under 5% since. With such enormous swings and unpredictability - there would be very little chance to take advantage and huge opportunities to loose - which I can personally attest to.
So my bottom line - not a recommendation but clearly my belief - you can be your own worst enemy when it comes to investing - seek the advice of an independent professional and refresh that knowledge annually. You'll be in a better position and more informed than you could possibly be by going it alone.
Second part to that - if you've managed to put enough away - you should be situated to take your annual TSP amounts from the gains that are posted annually and still live comfortably. Your ultimate goal there should be to not dip into the principal (invested amount at the beginning of the year) and only draw out that which is added during the year - even better to have that amount continue to grow over time. When you hit age 72.5 you will no longer have a choice in this as you'll be forced to take out the "then" required amount based on IRS rules or suffer a penalty equal to that amount - so, better to enjoy it than give it to the government.
Said a lot here - hope I've not offended any in all of this - These however plain and unmasked are my beliefs and experiences - and perhaps they will help others learn from my mistakes and gain from their own potential.
Respectfully.
On Friday, June 7, 2019, 7:37:00 AM PDT, bill_steele_sr@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
Let me qualify my question by saying that I understand the disclaimer about this not being a place where advise is given in a licensed fiduciary manner- so I'm looking for Casual opinions and will not bear any ill will if I follow suggestions that turn out to be less than profitable.
With that said. I'm 5 years away from retirement. Should I keep going with this group's recommendations- currently "S" or should I move my money and park it in safer waters. The groups has a good track record, while the managed funds are not so good. If I stay with the group for 5 years and do well- and then the market tanks in 4 years, am I likely to earn enough for the loss to offset the dismal returns I'd get if I parked it in an L Fund?
I'm not versed in talking about this stuff so I hope my question makes sense. Bottom line- Where to put my money with 5 years to go. I'm also considering increasing my contribution from 10% to 15% for the final 5 years.
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Posted by: MDJ <jonesmd2@yahoo.com>
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