Thread: Is there any correlation on 'G' Fund payday and gains and losses for the S and I Fund

Tempest,

IMHO!

This a risk vs reward question.
Something that each member has to consider on their own. I can stay in the G-fund, enjoy my deductions and never touch my principal.
Look at the make up of the L-(Life Cycle) funds, the risk is based on age!
The equity funds will vary according to the US market and Internationals. This is where you have to watch the charts.

Riding out a fund is not the thing to do! You have to sellect the best funds, watch the fundamentals, watch the technical analysis (charts). Sell when "stops" are broken, and buy when prices are low. Otherwise the L-funds seem to be the best option if you want to buy and hold.
For some of us that like to trade this is the fun of being a trader. It's just a matter of is this what you want to do?

There is a learning curve, but a lot of us take the option of managing our own accounts, I guess thet's the bottom line, trading / buy and hold, it's all here on TSPTalk.

Originally Posted by Tempest

Obviously you lose money staying in the 'G' Fund to get your penny when the 'S' and 'I' are up. Is there any percentage anyone can give me on this? Do 'S' and 'I' pay out more 50% of the time, 20 % of the time, 39.57% of the time or whatever on the same day I get my 'G' penny? Just curious.

I know we get our 'G' penny' regardless of what the other funds do. Just wondering if there is a statistic that can make me comfortable to ride it out in 'I' rather then head for the bunker and get my penny (given that there are other market parameters I should be watching.)

I just did it in excel with my historical data since June 2003.

The S fund was up exactly 50% of the time, so no correlation.

The I fund was up 56.11...%, so no significant correlation.

Speaking of the penny how exactly is this figured out. If I had everything in the G fund on Monday-why does my account not reflect a penny increase on my balance. Must be missing something here. Thanks!!

Originally Posted by VirginiaBob

I just did it in excel with my historical data since June 2003.

The S fund was up exactly 50% of the time, so no correlation.

The I fund was up 56.11...%, so no significant correlation.

But what percent of the non-penny time was the S (or I or C) fund up? I would guess (in a bull market) that equities are up more frequently than down, so 50/50 on penny days could be a lower than usual chance of gain. That would provide a lot more support for the G-penny strategy.

Overall, the S-fund is up 55% of the time and the I-fund is up 53.6% of the time. So pretty much the same either way.

Further complicating the issue: Timing the penny payoff is not a sure thing. Missing it and then missing an up day in the market once or twice a year will likely negate any positive impact the G fund strategy might gain.

And so far, we haven't seen anybody score 100% over any length of time on the penny pay-out.

The theory is sound (with marginal benefit), but the implementation is not practical so far.

Plus, one gets busy, looses track and then misses a day here or there, and once again the strategy is lost.

So, if the G-fund payoff strategy is your hope of TSP wealth, it is a fragile proposition at best. With the amount of effort and concentration one would have to devote to this effort, equal work given to study of basic investment strategies might yield a more satisfying result. Or, follow the leader. Or, buy a service or newsletter. Or, get a Monkey and a dartboard

Best of luck...

Originally Posted by haffey005

Speaking of the penny how exactly is this figured out. If I had everything in the G fund on Monday-why does my account not reflect a penny increase on my balance. Must be missing something here. Thanks!!

Hi Haffey -
If you mean Tuesday's penny gain, your account should reflect the gain by holding the same number of shares that are now worth .01 more. This may seem overly simplified but your account balance is the number of shares in the G fund (assuming a 100% G fund allocation) times Tuesday's closing share price. It had to have gained. Sometimes there is a delay in posting the gains.

Originally Posted by SkyPilot

if the G-fund payoff strategy is your hope of TSP wealth, it is a fragile proposition at best

I agree with SP's points. In addition, with the (slowly) increasing value of the G fund, the penny days will creep closer and closer and likewise become less and less predictable. Still, for now, there are times when you can be 99.9% sure of the penny day, while some "systems" may have mixed signals.

In an earlier thread, it was discussed how "on average" a predictable, 5% annualized yield, every-7-day (5 trading days) G penny strategy would benefit a buy-and-hold equity allocation yielding up to 25% annualized return. Until I achieve this standard consistently, I believe there is still a place for this strategy (selectively).

The other example was what Tom was trying to achieve recently, jumping over from the F fund for a day. Since nobody that I have seen on this site or anywhere else has been able to consistently predict the F fund day-to-day for any length of time and make money, a G penny strategy while "on the sidelines" in a generally upward F fund could pay off--again "on average" and especially since I doubt the F fund will see annualized returns over 25% for a duration long enough to make a difference with this strategy.

And the closer it creeps, the less value it will have (percentage wise). Eventually (distant future) it will pay most every day. Then the strategy will be focused on when to jump out of the G fund rather than in, because the focus will move from timing the penny back to timing the market.

wow... that will really be confusing

Whether or not you agree with the G penny or not, it's very valuable to know all the tools at your disposal such as the G fund penny and the I-fund tricks some have been figuring out lately. The more we know, the better.

Will the G fund pay Monday?