Another newbie here

**riskybusiness** · 03-19-2005, 06:29 AM

First of all, I have to say this is a great website, very informative and I have learned some new tips on investing my money in the TSP Plan. I also like the TSPGO website, but to be honest I have a difficult timeunderstanding the techniques used to buy and sell. I never took a business class in college, so forgive me.

I also understand that I take 100 percent responsibility for my retirement investments.

Iam 35 years old and have contributed to the TSP Plan for about7 years now. It's been kind of frustrating to see the money add up rather slowly. However I still have at least another 22 years before retirement...if not more.

I have been thinking about taking more risk by adding more money/future contributionsto the C,S and I funds. Ihad 60 percent G and 40 percent Cin 2004 and in prior years before even thinking about investing more wisely. I recently changed my contributions to 20g,15f,20c,20s,25i. I have11 percent of my salary contributing right now, with a slight increase each year. I have a 401K maximimizer which figures out the maximum I can contributewith the least penalization on income taxes/take home money.I really would like to be more aggressive, butthe economy outlook this year looks rather bleak to me. Rising interestrates and oil prices, along with the trading debt and national debt are adding to fears. Anyone think the G fund will be the winner this year? In past history I don't think the G fund had ever been an annual winner. It would be kind of odd if that happens. I've also thought about ditching the F fund the rest of the year because of rising interest rates. When can I be more aggressive with these funds? Any advice?

I also feel the more diverse contributions/allocations should do better in the long run. I personally dont think putting more than 40 percent in any fund is a really good idea. I have been burned twice this year but trying very short term IFT's on stock market trends and I don't plan on using that strategy again. I appreciate the value of this web forum, but I can honestly say that the stock market is unpredictable. In addition, does anyone else think that the investors on wall street overreact to a lot of short term news/gov't reports? When I look back at a lot of short term gains or losses...they seem to be more "emotional investing" versus "logical investing". Any thoughts?

**rokid** · 03-19-2005, 12:45 PM

Riskybusiness,

It appears the market has already taught you some valuable lessons:

1. Diversify across all of the funds, i.e. "don't put all of your eggs in one basket."

2. The market is unpredictable.

3. High returns require high risk, i.e. the G Fund is safe, but it's never going to be a star.

Your current allocation looks good. I'd probably lower the bond portion by 10%, e.g. 10% G and 15% F. However, that's just me!

Your bond/stock allocationdepends on your tolerance for risk and 35% bonds is a slightly aggressive allocation (40% bonds is the standard recommendation). Since the market is unpredictable, you should set your allocationand rebalance on a yearly basis. You should also set your bi-weekly contributions to the same percentages as your allocation, e.g. 20g,15f,20c,20s, and 25i.

Finally, I recommend you read one or both of the following: Common Sense on Mutual Funds by John Bogle and A Random Walk Down Wall Street by Burton Malkiel. They'll give you the theory and study results that support this strategic asset allocation approach and explain why market timing rarelyworks.

Good luck!

**riskybusiness** · 03-20-2005, 03:09 PM

Rokid,

Thanks for your your input and advice,especially the book recommendations! Good luck to you as well.

:^

Risky

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