L vs do it yourself

**thurston** · 07-20-2005, 05:46 AM

Just from my simple mind looking at the prices of the funds knowing they all started at $10 it seems pretty easy to see which ones have done the best.

Now looking at how they want to distribute money in the L funds, why would you put money in the F fund except to buy low and sell high. It hasn't even done as well as the G fund. Similarly the majority of the percent is in the C fund but it hasn't done as well as either the S or I.

So just how static are these allocations. Will they put 100% (talking billions here) in the G fund when the market goes south or just ride it down?

**Spaf** · 07-20-2005, 06:05 AM

thurston

Based on what information they have released on these funds, and how they got there structure, from what analysis. And, who will supervise the funds. I have to rate the information to date as: insufficient. Rgds! :? Spaf

**mlk_man** · 07-20-2005, 02:05 PM

Welcome thurston. I don't believe they will be trading that way. Apparently it goes by age bracket and length to retire so I'm assuming they will only adjust your allocations yearly. Aggressive with more time left, conservative with less time left.

If they did it the way you mentioned, I'm sure costs would go up. They may anyway.

Good luck,

M_M

**James** · 07-20-2005, 03:55 PM

[align=left]From the July "Highlights" newsletter.
http://www.tsp.gov/forms/high05c.pdf[/align]
[align=left]Because it is important for each L Fund
to maintain its target investment mix, the
TSP will rebalance each L Fund automatically
â€” generally each business day â€” to
adjust the mix as a result of price changes
in the underlying funds. Then, each quarter,
the TSP will shift the investments in
each L Fund to a slightly more conservative
mix. In addition, experts will periodically
review the investment mixes of each
L Fund to be sure they are still appropriate.[/align]
[align=left]This still leaves a lot of questions.[/align]

**mlk_man** · 07-20-2005, 04:09 PM

SUre does. Apparently, they have 5 different L fund allocations. Up to you to decide which is right for you.

http://www.tsp.gov/lifecycle/flash/comingsoon.html

**rokid** · 07-21-2005, 02:31 AM

It would be interesting to see what return assumptions they're usingover the next 40 years. They seem really conservative. In addition, their FAQ explanation for a flat efficient frontier, i.e.the G Fund has really good risk/returns, is lame. The G Fund is only one end of the curve. The flatness is due to their low C, S, and I fund return assumptions. They may be correct. However, I'd like to see some numbers in addition to the graphics.

Finally, I've never seen a recommendationspecifying daily rebalancing. Usually the rebalancing recommendation is every 1-2 years. Letting your allocation ride, lets you take advantage of asset class momentum. Daily rebalancing during the 1990s would have been a disastrous strategy, i.e. selling the C Fund every day?:?

**mlk_man** · 07-21-2005, 03:08 AM

I agree rokid. What I found interesting is that given the stock fund allocations, no matter if aggresive, moderate, or conservative, they put the least in the S fund as opposed to the C or I.

I'm actually beginning to think they should call the "I" fund the "dollar" fund..........:shock:

**alaskanmoosehunter** · 07-21-2005, 05:21 AM

Just one man's opinion,

I think the L Fund will be for the slugs......People either to stupid :%or lazy :zzto learn how to determine their own destiny when it comes to retirement.

They will deserve what they get....One bad year in the market can take two or three years to recover!

Personally, I love my $$$$$ and will invest it& protect it at all costs.:!

Ben

**Pete1** · 07-21-2005, 02:52 PM

The domestic allocation of the L fund choices is basically, the same or very close to the "total stock market index fund" or Wilshire 5000. I am not surprised that TSP went with this allocation as does Vanguard for its target retirement funds. Not what I do but I understand the choice as it is widely recognized and accepted as a sound, long-term allocation for the domestic market because in essence, it is the market. The international allocation is higher than some and this is probably a good thing. The frontier does seem somewhat flat and I do not like the dailty rebalancing element.

**Dakota** · 07-27-2005, 03:56 PM

IO am having a hrd time figuring out what the L Fund even means its all greek to m e could some one please explain it in laymans terms

It simply does not make any sense to me

**Dakota** · 07-27-2005, 08:59 PM

Dakota wrote:

IO am having a hrd time figuring out what the L Fund even means its all greek to m e could some one please explain it in laymans terms

It simply does not make any sense to me

Read more articles on the l fund I dont think its a good Idea for someone else to be moving your money around for u. I dont think that there exist a so called professiional that should be in control of anyones money. If a person just dont want to mess with it and want to let someone else make transfers for them, then i think they are very unconcerned about thier money or just dont think they have the knowledge or time to watch whats going on in the world of economics. its probable taht u would do better than just sitting in g fund. But get real if u pay attention to the markets and stay on top of things no one is better to place your bets than you yourself

**grandma** · 07-28-2005, 07:06 AM

Dakota wrote:

...I dont think that there exist a so called professiional that should be in control of anyones money.

For some reason this suddenly brought to mind Lucille Ball trying to con banker Mr. Carmicheal, into letting her spend some money. ...not that the TV series character she was playing might not have needed the outside guidance, but from the point of view someone else was in control & had the say-so of what went w/her money.... It was funny then -