L Funds Beat Market Timers

**Silverbird** · 03-17-2008, 09:19 PM

Though I missed most of the I fund rise last year, a number people rode that one and made a profit through more than 1 trades a week and are the ones I heard called the "day traders". These multiple trades into and out of I were supposedly the big problem last year. However, if "dayly trading" on the charts led to losses where did the I traders, who are supposedly the same people as "daily traders" lose their advantage over L? From what I understood their profits were beyond the norm. So how did they do so badly over a two year period?

With L, supposedly you park in a fund based on your time of expected retirement. I started this year with 97% in L income, 3% in L 2030 since L2030 fits my retirement age but I really didn't like the looks of the market. Ended up -0.67% for the first half of January. Still getting myself out of the negative this year; if I had gone for 100% 2030 instead, as my retirement age would indicate I would be even farther in the hole than I am. I have been moving around into G and F this year and have cut my losses to -0.29%, much better than any of the L-Funds, and if I had moved more than 2X a month I would be in even better shape. Frequent IFTers, those of us who like to IFT more than 2x a month, most of us seem to be in G and F right now, which are doing a lot better than sitting in any of the L's, and one would assume with the day traders they are there too, on the whole, since people who are watching the market can see its tanking. So the chart for this year confuses me too.

**Silverbird** · 03-18-2008, 03:02 PM

By the way, I was in TSP during the 1999-2002 downturn; if I had been in the equivalent of retiring in 2030 - which would be close to the current 2040 - mix of funds, my losses would have been substantial. Since the L funds were created in reaction to the losses from that downturn, I think I should be able to question their validity. The people with a lot of investment in stocks took a bath; some are still making up their losses now.

**rokid** · 03-21-2008, 12:25 PM

The Long-Term Tallies for 21 March 2008.------Jim

**Bullitt** · 08-26-2009, 08:08 PM

Look at more than just the date when choosing your L-Fund.

We've consistently tried to warn investors that it's very important for them to ignore the date in the fund's name. They first need to determine their desired asset allocation prior to choosing the appropriate target-date fund to flesh out that asset allocation. Fund selection should be based on the fund's asset allocation and glide path, rather than the date in the fund's name.

One of the big problems with target-date funds is that they're now the default selection in many company retirement plans, with the target-date fund that most closely matches an investor's age being the one selected for them. However, that may not be the best fit for some investors, and it's definitely not the best fit for all investors.

http://news.morningstar.com/articlen...postId=2686718