Thread: Rokid's Account Talk

In your account allocation thing you stated the following:

"Theasset allocation expert,William Bernstein, claims that the key to successful asset allocation is not changing it once it is established. Therefore, if I'm in the ball park, allocation-wise,and hold fast, I should do all right."


I prefer the more hands-on approach.

When I first started my retirement account, I did exactly what the common wisdom was, meaning I went to a 'financial guy' who helped meset upwhat he told me was a sensible allocation. I did make the mistake of not watching the returns closely enough, but last year when I did bother to check things out, I gained 4% average a year for 10 years. With those returns, I may as well have been in bonds and saved myself the risk.

I will say this, my asset allocation portfolio as I had it before was perfectly balanced. Every fund managed to give pretty much the same mediocre performance so that no one of them became disproportionate to the others and the ratio stayed elegantly just so.

If only I had a Gerber Whole Life Insurance Policy...

(Sorry, the 'financial guy' also had a tremendous love for commissions, uh, I mean whole life insurance policies too.)

Citizen,

Are you talking about TSP accounts or something else? If you are talking about actively managedfunds, with high expenses, e.g. Fidelity Magellan over the last few years, your negative experience is a frequent and a widely documented occurrence.The manager and fund expenses/loads eat up all of your profits.

If you're talking about a TSP buy and hold approach achieving such poor results, I'd be interested to know what your percentage allocations were,over what period, and whether you rebalanced. I've only been managing my family's TSP and 401K accounts since2003 - prior to that I was oblivious.However, since 2003, my passive asset allocation approach hasdone very well - much, much better than 4%.

In addition, I like the elegance and quantitative aspects oftherandom walk, MPT, CAPM, APT, and multi-factortheories. However, I'm open to and very interested in others' real world experiences, e.g. market timing and tactical asset allocation. Unfortunately, I can also see that market mis-timing practiced by many investors can be hazardous totheir financial health.

Finally, I get the impression that managing the accumulation phaseof retirement accounts is easy. The hard part is making themprovide an adequate,constant, inflation adjusted income stream throughoutretirement. That's why I continue to study the issue.

Incidentally, I notice it's the same old Lions (and Tigers). They’ve done nothing since Bobby Layne in 1957.However, there's always hope for the Wings. I've got my tickets for the Caps/Wings December gamein DC. Go Wings! :^

I'm not talking about TSP for sure. I had the same experience of being oblivious and finding I could do better with active management.

The funds were managed by Nationwide.:X

rokid wrote:

If you're talking about a TSP buy and hold approach achieving such poor results, I'd be interested to know what your percentage allocations were,over what period, and whether you rebalanced. I've only been managing my family's TSP and 401K accounts since2003 - prior to that I was oblivious.However, since 2003, my passive asset allocation approach hasdone very well - much, much better than 4%.

I'm betting that if you were doing it during 2000-2002, you might be singing a different tune.

Maybe, however, I would have to have been fully invested in the much maligned F Fund during theentire period for the best return. That might have happened in 2001-2002 - but not in 2000.

My current allocation would have yielded a -26.45% return for those three years. On the other hand, the S&P 500 yielded -43.13 during the same period.

If you can market time, you can make big bucks. If you can't, you can lose big. Personally, I think I fall in the latter category. I'm a loser!

Not sure if you've seen the latest trackers. It seemed that there are more people now beating the buy and holders, especially those that have a 20% allocations across the board. I can't seem to find the stats that you put out a couple of months ago about market timers vs. buy and holders allocated 20% across the board.

I think that there will be more that will beat the buy and holders once market starts taking off during the last quarter. Just my observation by looking at the trackers...

rokid wrote:

If you can market time, you can make big bucks. If you can't, you can lose big. Personally, I think I fall in the latter category. I'm a loser!

I don't think you're a loser rokid. You pay attention to your investments. Most of us were "losers" before TSPtalk opened our eyes to our investments. As I've stated before, this site will prove it's worth more when the market hits a prolonged bear and all of us are sitting on the sidelines just watching.

BTW, I saw a black bear a couple weekends ago for the first time outside of captivity. I pulled out my "G" symbol and it ran away.......:^

Good luck to you,

M_M

Hey, Thanks. Good luck to you too!

Finally!

Mycontribution goes into TSP tonight and the market is seriously down. Normally, the marketgoes up (or seems to) on pay day. That action makes my new purchases expensive and, therefore, reduces my long term returns.

FYI. Sep 05 Tally with additional data,information and analysis. No conclusions.

pyriel wrote:

Not sure if you've seen the latest trackers. It seemed that there are more people now beating the buy and holders, especially those that have a 20% allocations across the board. I can't seem to find the stats that you put out a couple of months ago about market timers vs. buy and holders allocated 20% across the board.

I think that there will be more that will beat the buy and holders once market starts taking off during the last quarter. Just my observation by looking at the trackers...

Maybe...

Market timers averaged, YTD, 1.05%less than the average passive allocation return (mine, 20% each fund, 60/40 stock/bond allocation, and all of the "L" funds). Every one of the passive allocations,except the L Income Fund, beat the average market timer's YTD return.

Over the last three months, the average market timerreturnwas .14% lessthan the average passive allocation return. For that period, all of the passive allocation returns, except 60/40 stocks, L2010, and the L Income Fund return, beat the average market timer return.

Finally, the average passive allocation return over the last three months beat 59% of the market timers. The average passive allocation return YTD beat 62% of the market timers.

In August, only 15% of the market timers had beaten the YTD passive allocation and 23% had beaten the 3 month average.Market timer returns did improve in Sep.