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Thread: burrocrat's Account Talk

  1. #13

    Join Date
    Mar 2006
    Location
    Raleigh, NC
    Posts
    3,416

    Default Re: burrocrat's Account Talk

    Burrocrat,

    You left a large and informative comment in my thread. In particular - thanks for correcting me on how loans are repaid into an account. That has, apparently, changed since a friend did it in 2004.

    Anyway,

    I took a tsp loan this spring at 2.875% and paid off all credit card debt running high-teens into 20+%, thinking i would come out better than even on the interest spread. No comment about poor financial decisions that lead to the credit card balances in the first place. Now I just have a student loan consolidated at 2.5% fixed, no other consumer debt or mortgage or car payments. Nothing fancy but the roof don't leak and the car runs good, gets the job done. Poured all resources into paying the tsp loan off and in 2 more weeks will be clear of that too.

    Given how the market took off since March, obviously I would have done better leaving the money in tsp for the rally and been patient paying on the cards. But I've been sleeping much better at night knowing the CC companies can't sneak in after the lights go out and put it to me again and again. Fringe benefit, not sure how to factor that in to the calculations though.
    is a very good use of a loan since you don't do it every year! And you quickly paid it back so it didn't hurt you too much. You got a guaranteed 20+% return by paying those pigs down.

    By the way, sssshhhhhh...

    I did it the other way. I've reduced my contributions over the past year to pay down my credit cards. Feels good to get to the point where those bozos can't do any real damage to me. But, like you, I could only imagine the results of posting 15% of my earnings to TSP during the collapse. I won't spend any seconds kicking myself in the head though. Sleeping fine now...
    Lookin' up at the 'G Fund'!!!

  2.  
  3. #14

    Default Re: burrocrat's Account Talk

    So there it went, got the action today that I was looking for when I made the trade almost 2 weeks ago, but how low can she go? And now I'm not as confident that it will bounce right back.

    I was originally looking for 3-5% down over a few days and then get back in, but rarely does the market deliver what we expect when we expect it. And I run a risk of falling into the trap of settling on a reaction to percieved market events, but by the time it happens underlying conditions have changed and the original response is no longer valid.

    Man this investing stuff is hard.

    I considered moving more into CSI this morning but I expect to see better buying opportunities over the next week or so and don't want to be out of trades this early in the month.

    Moving to a defensive position right now is not on my table, I'd rather be in and watch it fall, knowing that long term I will have more shares, than be out and watch it skyrocket without me. Probably not the best approach, but i got a bit of that "when you ain't got nothin you got nothin to lose, never had none, prolly never get some, but if i'm right about this, things could be sweet" attitude.

    Problem is there's a lotta sweat before we get to sweet. Gonna ride this out a for a while.
    100g

  4.  
  5. #15

    Default Re: burrocrat's Account Talk

    Woohoo! I finally paid off the tsp loan I took out back in March. The last transaction cleared the tsp website at yesterday's closing prices and are back in my account. For some background on my ?logic? behind the move and other interesting tidbits see boghies thread:

    http://www.tsptalk.com/mb/showthread.php?t=4474

    Here's the skinny: I suppose my tsp loan falls into the "scenario #1" option. I didn't buy a brand new car with it, instead paying off high-rate credit cards, but did it because that move had a higher personal value to me than to watch my contributions (potentially) continue to lose money while drowning in consumer debt.

    As it turns out, I would have done better by leaving the money in tsp and enjoying 100% of the rally vs. only having half of it in for the last 5-6 months, and would have paid the cards off at about the same time by being more patient.

    Here's another unintended consequence: when i took the loan out about 55% of my balance was available to borrow due to previous contributions before i became eligible for the employer 5% match. Now that it is all paid back only 51% of my balance can be borrowed against. While 'my money' was out the 'free money' was enjoying a great run + compounding. Loan repayments only got the 2.875% interest gain i was paying. So that will always have a negative effect on lifetime returns, lost both the current and future opportunities of getting a big run-up and leaving those increased gains in for another 20 years to work their magic. Not a very high powered mathmatical calculation there, but the effects are real and something to be aware of if you are considering tsp loans.

    Now that debt is down and i have more disposable income, I increased my payroll contributions to 10% + 5% match so that should help some with my retirement goals. I think birchtree pointed that out to me when i first joined this board: it's all about aquiring lots of shares over a long time horizon, the payoff is way down the road.

    Now let's hope i can increase those future returns by smart and timely trades a couple of times a month.
    100g

  6.  
  7. #16

    Default Re: burrocrat's Account Talk

    Quote Originally Posted by burrocrat View Post
    Woohoo! I finally paid off the tsp loan I took out back in March. The last transaction cleared the tsp website at yesterday's closing prices and are back in my account. For some background on my ?logic? behind the move and other interesting tidbits see boghies thread:

    http://www.tsptalk.com/mb/showthread.php?t=4474

    Here's the skinny: I suppose my tsp loan falls into the "scenario #1" option. I didn't buy a brand new car with it, instead paying off high-rate credit cards, but did it because that move had a higher personal value to me than to watch my contributions (potentially) continue to lose money while drowning in consumer debt.

    As it turns out, I would have done better by leaving the money in tsp and enjoying 100% of the rally vs. only having half of it in for the last 5-6 months, and would have paid the cards off at about the same time by being more patient.

    Here's another unintended consequence: when i took the loan out about 55% of my balance was available to borrow due to previous contributions before i became eligible for the employer 5% match. Now that it is all paid back only 51% of my balance can be borrowed against. While 'my money' was out the 'free money' was enjoying a great run + compounding. Loan repayments only got the 2.875% interest gain i was paying. So that will always have a negative effect on lifetime returns, lost both the current and future opportunities of getting a big run-up and leaving those increased gains in for another 20 years to work their magic. Not a very high powered mathmatical calculation there, but the effects are real and something to be aware of if you are considering tsp loans.

    Now that debt is down and i have more disposable income, I increased my payroll contributions to 10% + 5% match so that should help some with my retirement goals. I think birchtree pointed that out to me when i first joined this board: it's all about aquiring lots of shares over a long time horizon, the payoff is way down the road.

    Now let's hope i can increase those future returns by smart and timely trades a couple of times a month.
    Excellent, good for you!

  8.  
  9. #17

    Default Re: burrocrat's Account Talk

    New allocation: 0G, 10F, 30C, 30S, 30I.

    Putting it in blind before the open this morning, headed to the county fair all day to enjoy the finer things in life, no blackberries allowed.

    If things go well this will be the first half of a short term trade. Looking to get more shares at a 1% discount come closing time. I mean come on, how many times can the bulls reverse what should be a negative day? Then we ride the warm and fuzzy pre-holiday wave as the sideline money buys the dip. If those stars align, I'll move more nuetral Thursday or Friday for the coming dog days of summer.

    mmmm, funnel cakes and dairy maids, gotta run.
    100g

  10.  
  11. #18

    Join Date
    Apr 2005
    Location
    Gainesville, Florida, USA
    Posts
    24,244

    Default Re: burrocrat's Account Talk

    I hope you had the opportunity to try a blackberry cobler warmed over a couple scoops of vanilla ice cream - it's the best way to share a date so use two spoons. The wife and I used to do that all the time even after marriage. Did I miss the point about your blackberry - not really.


  12.  
  13. #19

    Join Date
    Sep 2007
    Location
    Sierra Vista, AZ
    Posts
    34

    Default Re: burrocrat's Account Talk

    Mornin' All,

    It's easier to not get confused if one uses the proper terminology for the IT device: dingleberry

    hopin' Ferdinand has some charges left
    Unthinking respect for authority is the greatest enemy of truth. -- Albert Einstein

  14.  
  15. #20

    Default Re: burrocrat's Account Talk

    Well that didn't go exactly as planned, got the direction right, just didn't have the distance. Sold F up and got C & S down, but the I gains cancelled everything out, looking back at the news fom yesterday morning i should have seen that coming.

    That dang ferdinand just about run right over my dingleberry.

    Glad i wasn't looking or i might have cancelled that trade before the deadline. Now i wonder if the momentum is there to carry next week so that i can execute the 2nd part of the trade. 50/50 chance i guess, either we win or we lose, there's worse odds out there than that, just got to be on the right side of the dime is all, otherwise you get left.

    Come on VIX give us something to laugh or cry about. I know i know, careful what you ask for, but this sideways stuff's got me all jumpy. Ready - break! Go bulls.
    100g

  16.  
  17. #21

    Join Date
    Apr 2008
    Location
    Cleveland, Ohio
    Posts
    12,148

    Default Re: burrocrat's Account Talk

    Rember that Tuesday starts your 2 IFT's for September.
    May the force be with us.

  18.  
  19. #22

    Default Re: burrocrat's Account Talk

    Looks like we're in for a rough ride today. This should be a good test of whether the sideline money really believes they need to get in at any opportunity, or if they actually prefer the comfort of hiding their heads under the covers.

    Where we end today is less important to me than how we get there. Straight line or a little push-pull? Should be informative. How fast can the pundits change their tune from green shoots to i told you so? Enquiring minds want to know.
    100g

  20.  
  21. #23

    Default Re: burrocrat's Account Talk

    Well i missed it by two weeks last time i made a trade, this time i was only off one day. I know it's a small data set, but hey any two points make a straight lineline, now we're headed somewhere.

    I know they say trying to time the market is a fools game, but who are we kidding, deliberately shifting funds to take advantage (or defend against) market moves is just that. So what is it called when doing it with a retirement account, with limited general offerings, and a two trade limit as a handicap?

    I guess the trick is to find a balance in there somewhere, obviously can't chase every wind that blows today, probably best to focus on a little bit longer time frame and position for a few weeks at a time, but then the risk is getting too complacent and leaving it sit in the wrong place too long, that didn't work out so well for me last year.

    I don't have much faith in the G fund getting where i want to go so I justify being in the stock funds as a long term strategy. I hope i can do better than the 20% each allocation over the long haul, everything else would be gravy.

    A question for others who make regular trades in tsp: do you swing for the fences or are you just trying to improve the average a bit? and why?
    100g

  22.  
  23. #24

    Join Date
    Mar 2006
    Location
    Raleigh, NC
    Posts
    3,416

    Smile Re: burrocrat's Account Talk

    Quote Originally Posted by burrocrat View Post
    A question for others who make regular trades in tsp: do you swing for the fences or are you just trying to improve the average a bit? and why?
    Normally, I use three allocations that I set for myself after reading Ric Edelman's 'The Lies About Money'. I have an aggressive allocation, a normal allocation, and a conservative allocation:

    Aggressive: 0%G, 0%F, 50%C, 25%S, 25%I - Exp Ret = 9%, StdDev = 11%
    Standard: 0%G, 20%F, 40%C, 20%S, 20%I - Exp Ret = 8%, StdDev = 10%
    Conservative: 10%G, 30%F, 30%C, 15%S, 15%I - Exp Ret = 7%, StdDev = 8%


    I have jiggered some of Edelman's allocations to balance risk and return a little bit - and to make things easy on the eyes.

    But, to answer your question - I just try to improve the average a bit.

    Last year was a once in a lifetime event. It was a Depression event. We might not be though it yet - that is for the historians to determine. The best one can do is mitigate losses and have at least something in the game that can grow if the game has changed. The folks who got rich in the 30's didn't do it in a 'G Fund' equivalent.
    Lookin' up at the 'G Fund'!!!

  24.  
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