Thread: Philosophy:"safety"- Is "G" right stuff?

Originally Posted by James48843

OK- here is a new thread for thought:

I've been debating for some time now about whether going to "G" for safety is the right thing to do, or whether utilizing one of the "L" funds might be better off for the long run.

Me too. But I can debate:

Originally Posted by James48843

...In the event of a downturn, we all know that "G" can't lose. You never loose a penny if you are in "G". However, you never GAIN either. At best, you can hit the day it pays the penny. Period.

But what if your prediction is wrong, and the markets gain instead? At most, you are going to gain the penny. But there is no other upside potential.

That's just it, you don't lose and you might get that $0.01.

Originally Posted by James48843

So I am thinking to myself (ok- no jokes- I talk to myself often...)

"Self....why not use the "L-income" fund instead of the "G" for safety?

I think and talk to myself all the time.

Originally Posted by James48843

One argument goes that if the markets go down, at most you'll only loose a few cents. Past history has shown L-income looses only about 3 or four cents even on big down days. And if the market is flat, the L-income will be flat, or perhaps gain a penny. And if the markets are UP, then you get a couple pennies as possible rewards.

By the way, that fund has lost 6 cents in the past. See 28 Aug 07.

Originally Posted by James48843

What do YOU think about the idea of using L-income rather than "G" as the possible safe haven?

Use it like every other fund until a penny a share means $1000 bucks!

I think it would be wise for me to read "How to talk to a Bear" before I offer any opinions - don't you.

Originally Posted by James48843

OK- here is a new thread for thought:

I've been debating for some time now about whether going to "G" for safety is the right thing to do, or whether utilizing one of the "L" funds might be better off for the long run.

Here is why I am thinking about this:

In the event of a downturn, we all know that "G" can't lose. You never loose a penny if you are in "G". However, you never GAIN either. At best, you can hit the day it pays the penny. Period.

But what if your prediction is wrong, and the markets gain instead? At most, you are going to gain the penny. But there is no other upside potential.

So I am thinking to myself (ok- no jokes- I talk to myself often...)

"Self....why not use the "L-income" fund instead of the "G" for safety?

One argument goes that if the markets go down, at most you'll only loose a few cents. Past history has shown L-income looses only about 3 or four cents even on big down days. And if the market is flat, the L-income will be flat, or perhaps gain a penny. And if the markets are UP, then you get a couple pennies as possible rewards.

What do YOU think about the idea of using L-income rather than "G" as the possible safe haven?

Note: I am 47, have a very large risk tolerance, (probably higher risk tolerance than my age suggests I should) and don't mind loosing because I still have time before I have to take anything out. But I like the idea of possibly using "L-income" as the safety zone because of the ease in which it alread spreads the risk around with a single move.

Your thougths?

Since the L-income is a blend of the five funds, it would be just as easy to have a couple "safe haven distributions" which would include a sprinkling of the stock funds and a distribution that was weighted heavily in bonds, and one that was light in bonds

something like:

85G 5C 5S 5I when bond prices are trending down and
50G 35F 5C 5S 5I when bond prices are trending up

Personally, I don't like playing with bits and pieces because in my mind your always either a litttle or a lot wrong - I'd prefer to be dead in the a$$ wrong or hallelujah right.

Originally Posted by Frixxxx

By the way, that fund has lost 6 cents in the past. See 28 Aug 07.

Yeh, true.

But it made it right back the next day. All of it.

Still, seems to me that if it DOES move up, you are just as likely to make an extra couple of pennies over the "G"'s return.

Anyway, I did it today. I'll have to see how it works out. I think I'll leave it that way for a little while and see what happens.

I like the fact that I'm closing in on my goal for the year. Now just about 2% away from my yearly goal, and still have three months to go. Not bad for a year that is only slightly above January's numbers.

I remember making over 8% a year in the "G" fund, I'll take that now!!chimp-bouncing-on-feet.gif

Originally Posted by nnuut

I remember making over 8% a year in the "G" fund, I'll take that now!!chimp-bouncing-on-feet.gif

And interests rates were how high? 14% (ouch!)

I'm also considering an L Fund as a safe haven unless it's G Fund penny pay out day. Somewhere to put my funds while I'm away and unable to manage my account on a daily basis.

Originally Posted by Hallatauer

And interests rates were how high? 14% (ouch!)

I'm also considering an L Fund as a safe haven unless it's G Fund penny pay out day. Somewhere to put my funds while I'm away and unable to manage my account on a daily basis.

It really is a philosophy. I think the "L" would be a great place for those months I can't manage my account..

It seems that some of you know when the 'g' is going to pay the penny, is that true? If so could you please explain how.