Thread: Super Long Term Outlook

Welcome flannel -

I would spread it out pretty evenly. The more aggresive you want to be, the more you should use the S and I. Aggressive meaning you take onmorerisk dueto greater fluctuations but have apotential forhigher longer term gains. See www.tsptalk.com/longer_term.html.

Tom

The following are investment classics dealing with long-term asset allocation strategies:

Stocks for the Long Run by Jeremy Siegel

Common Sense on Mutual Funds by John Bogle

A Random Walk Down Wall Street by Burton Malkiel

The Intelligent Asset Allocator by William Berstein

Note: All of the above resources strongly disapprove of market timing and technical analysis.

Divide it up between the three funds, you can't go wrong. Over the long haul you will be ok.

zbwmy,

I consider you a savvy investor, so I found your advice shocking. A young investor should never go with the G fund - much too conservative.

RadarKing

I am 26 years of age and am quickly approaching my 3 year mark for years in service. I know that I have many years ahead of me and know that I should be investing my TSP in the C, S, & I funds. My question is how to allocate amongst these three? Is any one of three funds better than the other? Or should I divide my 100% evenly among the three?


For what its worth words from GTO and what works well for me

MY ADVICE My account started at age 30 and has been fully vested for 14 years now and is a wonderful tax shelter

1. Contribute your Max amount allowed NOW and never talk yourself into anything less until your reach 20% Time is on your side! you won't miss it if you never allow it to land in your hand!

2. Use TSP site and calculate your growth over time and input different percentages contributed and that will tell the key story what even one percent difference will make over time and your future retirement

3. The new TSP internet system is the best that has happened and allows great flexibility of the user. Allow all contribution go into G Fund and do interfund transfers to other funds when the time is right, it never made since to me to allowcontributions to go directly into a fund that is losing, better to wait until the certain fund are already down and then insert a transfer

4. As far as which funds to use my suggestion would be All contributions go into G Fund, spread out 70% C, 20% S and 10% I.Watch your funds account closely and use this site to your advantage.Something I do now is kept track of what fundswere my actual my contributions plus 5% interest and kept them in C fund and all earnings made above that I vested in S and I fund. I find it easier to risk funds that didn't come out of the paycheck! Look at it like this it only on paper! But only risk what your willing to do without. and have a A, B, and C game plan to do this when the funds do this or reach this point and and F Fund is me when my hair turns more gray.

Hope this helps you or helps you to know what not to do main point Max Contribute NOW and dont look back later and say man I wished I done that when should have!

Good Luck>GTO

Overall allocation: 20% bonds (F Fund) and 80% stocks for an investor with a long term horizon - like yours. Alternately, Eric Siegel recommends 100% stocks. He claims stocks provide asuperior return and less risk in the long term, i.e. 10 years or more.

Stock allocation: 20-25% foreign (I Fund) and 75-80% US stocks. US stock allocations should reflect relative market capitalization - I believe 60% S&P 500 (C Fund) and 40% small caps (S Fund). Although the S&I Funds (or their indexes) have trailed the C Fund in recent years, most experts believe that they'll do better in the future due to mean reversion and the strengthening of global markets. In addtion, they provide diversification. On the other hand, John Bogle (Vanguard's founder) recommends a 100% S&P 500 stock allocation. He doesn't like the market and currency risks of foreign stocks and thinks the S&P 500 provides adequate diversification.

Sample moderate to aggressive portfolio: 20% F Fund, 36% C Fund, 24% S Fund, and 20% I Fund.

Also take a look at the holdings of the Vanguard Target Retirement Funds - specifically 2035. Again, approximately 80% stocks, 20% bonds and diversification across US and world equities.

Finally, do some research. You need to buy in to your allocation - thick and thin. Get it wrong and you could be eating cat food in retirement.

RadarKing wrote:

zbwmy,

I consider you a savvy investor, so I found your advice shocking. A young investor should never go with the G fund - much too conservative.

RadarKing

RadarKing,

FlannelPants wanted to know how to allocate between the C, S and I.

RTFQ