Help with strategy

**maggersmagoo** · 03-27-2009, 11:07 PM

I need a little help figuring out a long term strategy/allocation. I have at least 17 years until retirment, been in TSP for about 3 years. My current distribution is:

G 10.51%
F 10.73%
C 34.52%
S 23.17%
I 21.07%

and my current allocation is:

G 7%
F 7%
C 38%
S 23%
I 25%

I tried looking at some of the premium pay newsletters. I feel like I was trying to read Chinese. I just don't think I am the type to stay on top of that stuff and make bimonthly trades. I guess that means I am more of a buy and hold type.

With that in mind, is my current allocation aggressive enough? With 17 years, should I be 100% in stocks (G, S, and I right)?

If I buy and hold, at what point do I look to change my strategy? 10 years from retirement, 5 years?

I appreciate any suggestions.

**Spaf** · 03-27-2009, 11:44 PM

Originally Posted by maggersmagoo

I need a little help figuring out a long term strategy/allocation.............

Welcome to the message board Mr. maggersmagoo!

Most of us here are NOT buy and holders, only a few. Anyway we have some guidelines on long term allocations. See --> http://www.tsptalk.com/longer_term.html We are not financial advisors, as every body has their own unique financial situation. However, the link above will give you a good reference. And, it is updated to reflect current conditions.

Again Welcome,....Spaf....

**Callme_CO** · 03-28-2009, 12:02 AM

You might also want to look into the L funds they are your buy and hold based on how long until retirement. I.E

L2040 is the most risk (retirement being around the year 2040)
L2030 is a little less risk than the L2040
L2020 is even less risk than the other two

These funds were set up for people to buy and hold.

**maggersmagoo** · 03-30-2009, 08:58 PM

I have considered the L funds, but last time I looked at them I felt they didn't seem quite aggressive enough. Looking at the link you provided Spaf, it also seems pretty conservative for someone with 20 years to retire (it has 40% in the G fund much of the time).

I do like the format of that page, however. I like that it just spells out an allocation. Are any of the paid premium newsletters offered on this site that easy to read? The samples provided were a bit confusing to me.

And it's Ms. Maggersmagoo

**squalebear** · 03-31-2009, 12:21 AM

Originally Posted by maggersmagoo

I have considered the L funds, but last time I looked at them I felt they
didn't seem quite aggressive enough. (it has 40% in the G fund much of the time).

And it's Ms. Maggersmagoo

The pleasure of making your acquaintence is all ours ! Ms.MM !

On April 2009 the L2040 holds only 9.12% in the (G) Fund. The L2030
holds 20.13%,,, the L2020 holds 33.0% and the L2010 holds 66.25%

Pick your poison me Lady and Good Luck !

**James48843** · 03-31-2009, 12:32 AM

If it were me, and I had 17 years, I think that is exactly the kind of allocation I would be doing right now. Or doing the L2030 or L2040. ANy of those three would be something that I would be comfortable with. I too tend to be market agressive- so I am fine with taking risk. Some people are not happy taking risk, and that is ok for them. For me- I would think numbers like that would work just fine over time.

Good luck on your decision- and by the way- you are already ahead of many others in thinking hard about retirement needs now, long before you are going to need the money. Congrats!

**Pill** · 03-31-2009, 04:15 AM

I have 17 years till my earliest retirement date and I am 100% stocks(C, S, I), and I plan on being this way for at least 5yrs. Right now stocks are at record lows, prices weren't this low when I started my career. Take advantage of it, we have nothing but time. I recently increase my biweekly amount to take advantage of things.

The L-funds might be right up your alley. L2040 is aggressive enough. Being in an L-fund gives you a little diversification vs. being 100% stocks. With this downturn I wish I was in an L-fund for the diverse perk but it’s a risk I am willing to take. Good luck!

**Birchtree** · 03-31-2009, 04:28 PM

As an evangelical buy and holder myself - I'd think in terms of 75C and 25I and allow fate to lead my performance from this point forward. Use your payroll allocations to the same funds only in reverse for a couple of years - meaning buy 75% into I fund and 25% into the C fund - that should even it out over a few years. Then at some point switch back with your contributions. This is a very simple plan and that's the point of this strategy - sit back and watch your monthly statements. Dollar cost averaging is the redeemer of all portfolios in my opinion.

**Viva La Migra** · 03-31-2009, 05:34 PM

I'm staying away from the I fund. I don't like that you're betting against the dollar. It doesn't matter if you make a hundred thousand dollars in the I fund if the dollar's value drops 50%. In the end it's just not worth it.

**maggersmagoo** · 03-31-2009, 10:23 PM

Actually, in looking at the L2040, it is very similar to the allocation I have now. One thing that I find interesting about it is that the allocations are already decided for the life of the fund, which means that it is not taking into account the actual performance of the funds contained within it. I guess I was envisioning more that people were actually crunching numbers quarterly and determining the best allocations.

There is a temptation to follow your strategy Pill and go 100% stocks for a few years to take advantage of the "discounted" stock prices we are experiencing. Are you evenly divided amongst C, S, and I?

**Pill** · 04-01-2009, 12:13 AM

Originally Posted by maggersmagoo

Actually, in looking at the L2040, it is very similar to the allocation I have now. One thing that I find interesting about it is that the allocations are already decided for the life of the fund, which means that it is not taking into account the actual performance of the funds contained within it. I guess I was envisioning more that people were actually crunching numbers quarterly and determining the best allocations.

There is a temptation to follow your strategy Pill and go 100% stocks for a few years to take advantage of the "discounted" stock prices we are experiencing. Are you evenly divided amongst C, S, and I?

No I am currently 15% C. 35% S, 50% I. I've been this way since last April I believe. I wish I was more evenly. Since the downward plung, I haven't moved any thing because I don't want to lose any thing. My dollar amount is down however I still own all the shares. (I haven’t been investing long but I know this method will pay off vs. running for cover) Sure protecting your account is wise however timing the market in my opion doesn’t beat Dollar Cost Averaging. 35,35,30/30,30,40 is where I would like to be now. Good luck!