Thread: <1%IFT Option

SqualeBear - Again, thanks for this technique...

I am going to try to use the L2010 as the basis for a self reallocating store of conservative holdings during this current mess - EuroTrash zone heading for the dumper. The L2010 allocation has a 3% Risk/3% Return to Risk ratio according to my Quicken thingy.

However, in an attempt to allow me to grow my standard deviation in the event of a market recovery I will be placing at least a point in F/C/S/I/L2020/L2030/L2040. The initial allocation also has a 3% Risk/3% Return to Risk ratio according to my Quicken thingy. So, that is a good thing.

That should allow me to move up to 7% into riskier investments every day - and still have the L2010 holdings reallocate automatically.

Gotta work the math. Don't want to overly damage the security of my initial L2010 holdings.

Geez, I hate the IFT limit.

Originally Posted by Boghie

SqualeBear - Again, thanks for this technique...

I am going to try to use the L2010 as the basis for a self reallocating store of conservative holdings during this current mess - EuroTrash zone heading for the dumper. The L2010 allocation has a 3% Risk/3% Return to Risk ratio according to my Quicken thingy.

However, in an attempt to allow me to grow my standard deviation in the event of a market recovery I will be placing at least a point in F/C/S/I/L2020/L2030/L2040. The initial allocation also has a 3% Risk/3% Return to Risk ratio according to my Quicken thingy. So, that is a good thing.

That should allow me to move up to 7% into riskier investments every day - and still have the L2010 holdings reallocate automatically.

Gotta work the math. Don't want to overly damage the security of my initial L2010 holdings.

Geez, I hate the IFT limit.

No, Thank you ! AND everyone here at TSPTalk.com

Bumpin' the <1% strategy so a new crop of newbies can enjoy the fruits of SqualeBear's devious mind

Boghie,
Thanks for the bump. I have my head wrapped around the the way this <1% strategy. But I do have a couple of questions to ask:

With the way the member auto tracker is set up, will it accept the <1% changes and adjust my standing accordingly?

If I were to have %96 G, 1% F, %1 C, %1 S, %1 I, would that mean my risk/reward level would be +/- %4?

I understand how the L funds work; but what is the benefit of having 1% in the L funds when using the <1% strategy?

Thanks in advance!

- Emo

* Edited percentages to equal 100%.

Emo,

I see a kindred spirit in the way you write and think.

With the way the member auto tracker is set up, will it accept the <1% changes and adjust my standing accordingly?

No, Tom (the purveyor of this fine site) has no clue of the actual amount of casholla you have in your TSP account. And, he can't know the initial fractionals you are working with. CH and I have yakked about this a bit over beer and Mexican food and have no solution. The 'problem' also arises when paycheck contributions come into play. It will affect returns more when you have a smaller asset base. My advice. Do well and prosper and don't get too competitive with the AutoTracker. It's for fun. And, more importantly, it’s a tool to help you get your actual return (sometimes called an Internal Rate of Return (IRR) or Compound Annual Growth Rate (CAGR)). You know how your allocation is doing without the data being polluted by paycheck contributions.

Oh my...

I should read before I type. You enter the data into the AutoTracker. Thus, it will adjust your 'standing'. Your standing adjusts based on the performance of your allocation compared with us sods out here.

If I were to have %96 G, 1% F, %1 C, %1 S, %1 I, would that mean my risk/reward level would be +/- %4?

A 96% holding in the ‘G Fund’ will give you the ‘G Fund’ return +/- a tiny fractional. So tiny it isn’t worth the effort to compute. My guess is that you got the 4% number from one of my attempts to attain the LIncome performance from Quicken. The LIncome and L2010 incorporate holdings from all the funds – all greater than 1%. My guess is that a 96% holding in G will give you about 2.375%. The risk approximates 0 because it is guaranteed by the full faith and confidence of the government. Treasuries will default before the bond assets in the ‘G Fund’.

An allocation like the one you presented is simply a setup for <1% moves. In affect, you have bailed to safety – but, still want some ability to migrate back into the other funds if your bailout was ill timed.

I understand how the L funds work; but what is the benefit of having 1% in the L funds when using the <1% strategy?

Each of the L funds has some of its allocation set toward F/C/S/I. Even the LIncome fund has 26% of its assets invested in F/C/S/I. Thus, leaving that percentage point (FuturesTrader seems to leave 2%) in the five L funds gives you the ability to move another <5% into funds with more equities than the ‘G Fund’.

Finally, if your allocation changes you can update the AutoTracker. There is no limit to changing that. Maybe Tom will challenge (or the folks here will challenge) the accuracy of big moves after your first two IFTs. I don’t know. We are all honest chaps here…

Originally Posted by Boghie

Finally, if your allocation changes you can update the AutoTracker. There is no limit to changing that. Maybe Tom will challenge (or the folks here will challenge) the accuracy of big moves after your first two IFTs. I don’t know. We are all honest chaps here…

We currently don't automatically limit the # of transfers entered in the AutoTracker like the TSP does, although I did recently add a message to pop up after IFT #2 to say, are you sure this is a legitimate transaction?

One of our members questioned the moves of another the other day, and it turned out they were making many transfers in the AT each month, saying he was just "trying different things" and not mirroring their TSP account . I sent them a message and straightened it out. The worse thing that might happen if the transfers are not within the TSP rules is, you may not be eligible for prizes that month / year but if it is an ongoing problem, I'll just delist the account.

It is pretty obvious when someone's IFT is using the < 1% move and will allow all of them. If there's a problem I will just ask you about it.

With 500+ participants, it is pretty self-regulated. You can easily see who is making more than the allowed IFT's in the standings, and then you can check out their IFT history to see if they are legit or not.

If anyone ever sees some strange activity, just let me know and I'll check it out.

Thanks!

Originally Posted by Boghie

Emo,

I see a kindred spirit in the way you write and think.

With the way the member auto tracker is set up, will it accept the <1% changes and adjust my standing accordingly?

No, Tom (the purveyor of this fine site) has no clue of the actual amount of casholla you have in your TSP account. And, he can't know the initial fractionals you are working with. CH and I have yakked about this a bit over beer and Mexican food and have no solution. The 'problem' also arises when paycheck contributions come into play. It will affect returns more when you have a smaller asset base. My advice. Do well and prosper and don't get too competitive with the AutoTracker. It's for fun. And, more importantly, it’s a tool to help you get your actual return (sometimes called an Internal Rate of Return (IRR) or Compound Annual Growth Rate (CAGR)). You know how your allocation is doing without the data being polluted by paycheck contributions.

Oh my...

I should read before I type. You enter the data into the AutoTracker. Thus, it will adjust your 'standing'. Your standing adjusts based on the performance of your allocation compared with us sods out here.

If I were to have %96 G, 1% F, %1 C, %1 S, %1 I, would that mean my risk/reward level would be +/- %4?

A 96% holding in the ‘G Fund’ will give you the ‘G Fund’ return +/- a tiny fractional. So tiny it isn’t worth the effort to compute. My guess is that you got the 4% number from one of my attempts to attain the LIncome performance from Quicken. The LIncome and L2010 incorporate holdings from all the funds – all greater than 1%. My guess is that a 96% holding in G will give you about 2.375%. The risk approximates 0 because it is guaranteed by the full faith and confidence of the government. Treasuries will default before the bond assets in the ‘G Fund’.

An allocation like the one you presented is simply a setup for <1% moves. In affect, you have bailed to safety – but, still want some ability to migrate back into the other funds if your bailout was ill timed.

I understand how the L funds work; but what is the benefit of having 1% in the L funds when using the <1% strategy?

Each of the L funds has some of its allocation set toward F/C/S/I. Even the LIncome fund has 26% of its assets invested in F/C/S/I. Thus, leaving that percentage point (FuturesTrader seems to leave 2%) in the five L funds gives you the ability to move another <5% into funds with more equities than the ‘G Fund’.

Finally, if your allocation changes you can update the AutoTracker. There is no limit to changing that. Maybe Tom will challenge (or the folks here will challenge) the accuracy of big moves after your first two IFTs. I don’t know. We are all honest chaps here…

The amount in each individuals account is a non-issue, nor is allocation contributions. If each person in the auto tracker starts with 1, as gains and losses are realized, that 1 fluctuates also. So hence my curiosity if we could do the <1% in the auto tracker to capture the reality of our individual accounts.

I understand the 0% risk of the G, but was trying to understand the risk of the allocation into the Equity funds.

The addition of L funds is to be able to ramp up exposure to equities in a volatile market. For example, if the market was flat, then hit a patch of volatility which may signal a breakout to either side. If I was 1%, 1%, 1% in CSI, the L funds would be good for another 3% exposure to equities? In theory I could adjust my exposure to equities up a hair shy of 6% a day, yes?

- Emo

Emo,

You hit it on the head with the 6% if you have assets in the other funds. It is actually potentially more if you use ALL five of the L Funds. If you leave some assets in C/S/I/LIncome/L2010/L2020/L2030/L2040 you can adjust them all up. That is a potential 8% move. Obviously, it will always be less since you will never be allowed a full point move in any of the funds...

I missread your point on the AutoTracker. The answer is yes. You can see Amoeba leading the pack with over 50 trades this year. He makes and records lots of bailouts and <1% moves. My bigger point is that the AutoTracker does not - and cannot - compound in your salary contributions. I really don't want Tom poking around my privates.

And, the assets you have outside of G have whatever risk they have. However, if you are 96% G you will never lose more than 4% - yuk, yuk. I see where you are coming from. However, if everything else goes to 0 the best investment will be guns and butter churns.

Originally Posted by EmoDx

The amount in each individuals account is a non-issue, nor is allocation contributions. If each person in the auto tracker starts with 1, as gains and losses are realized, that 1 fluctuates also. So hence my curiosity if we could do the <1% in the auto tracker to capture the reality of our individual accounts.

I understand the 0% risk of the G, but was trying to understand the risk of the allocation into the Equity funds.

The addition of L funds is to be able to ramp up exposure to equities in a volatile market. For example, if the market was flat, then hit a patch of volatility which may signal a breakout to either side. If I was 1%, 1%, 1% in CSI, the L funds would be good for another 3% exposure to equities? In theory I could adjust my exposure to equities up a hair shy of 6% a day, yes?

- Emo

Originally Posted by Boghie

Emo,

You hit it on the head with the 6% if you have assets in the other funds. It is actually potentially more if you use ALL five of the L Funds. If you leave some assets in C/S/I/LIncome/L2010/L2020/L2030/L2040 you can adjust them all up. That is a potential 8% move. Obviously, it will always be less since you will never be allowed a full point move in any of the funds...

I missread your point on the AutoTracker. The answer is yes. You can see Amoeba leading the pack with over 50 trades this year. He makes and records lots of bailouts and <1% moves. My bigger point is that the AutoTracker does not - and cannot - compound in your salary contributions. I really don't want Tom poking around my privates.

And, the assets you have outside of G have whatever risk they have. However, if you are 96% G you will never lose more than 4% - yuk, yuk. I see where you are coming from. However, if everything else goes to 0 the best investment will be guns and butter churns.

If everything goes to 0 I'll take the gun over a butter churn. I'm not a gun owner because of all the kids I have in the house, but when wearing the uniform I will double tap the bad guy so that my kids will still have their daddy.

-Emo

Emo,

Since I can't shoot straight - never had the honor of wearing the uniform - I'll choose to sit between you and Birch. I'll pass the water and ammo.

Originally Posted by Boghie

Emo,

Since I can't shoot straight - never had the honor of wearing the uniform - I'll choose to sit between you and Birch. I'll pass the water and ammo.

Back in the day you'd still in the have a place in the battlefield. Reload weapons, spot enemies, run messages, apply first aid... I am not a master at arms by any reach. Electronics Technician by trade but I do have a marksman with the 9mm and a sharpshooter with the M-16. I've scared the **** out of the entire range shooting the riot shotgun.

- Emo