Thread: New to investing in TSP, looking for suggestions on how best to invest

Maxwell wrote:

Onequestion is that on the allocations page of this site showing the current percentage allocated in the different funds, I see that 100% is invested in the G Fund, however the G Fund is only at $10.74, whereas the S Fund is at $14.47 and the I Fund is at $15.65. At this time wouldn't it be better to invest in the S and I Fund? I believe I am missing something here. If someone would be so kind as to explain this to me so that I may have a better understanding, I would appreciate it. Thanks.

I think you're missing alot.

1. The allocations page is how Tom (Mr. TSPTalk) is allocating his portfolio at the present time. Other member allocations are listed in a different section. Each are acting to make the best of what they view is on the horizon.

2. The current price of the funds has no relevancy whatsoever. Your goal is to invest in the fund that will go up the most, percentage-wise (or go down the least.)

saraho wrote:

I think you're missing alot.

My, my, such tact! :x

[line]

Welcome, Maxwell!

Read about allocation, namely asset allocation, dynamic allocation, strategic allocation, and then you can better understand market timing. Market timing in theory, anyway, since nobody fully gets it in practise, but proper asset allocation always works.

Keep hanging out on the board here and read some of the older posts on allocation, particularly from a dude named 'Azanon'.

Maxwell wrote:

Hello. I am new to investing in TSP. At least in taking a more active role in investing in the different funds. I am one of the ones that just put 100% in the G Fund and just left it there. Now I am trying to gain a better understanding of the market and understand how best to invest in the different funds. Onequestion is that on the allocations page of this site showing the current percentage allocated in the different funds, I see that 100% is invested in the G Fund, however the G Fund is only at $10.74, whereas the S Fund is at $14.47 and the I Fund is at $15.65. At this time wouldn't it be better to invest in the S and I Fund? I believe I am missing something here. If someone would be so kind as to explain this to me so that I may have a better understanding, I would appreciate it. Thanks.

Welcome Maxwell. To someone new, it must be strange to see me (tsptalk) in 100% G fund. I went 100% G fund just this past Friday and it may not last more than a couple of days to a week. The last time I was 100% G fund was in April of 2004. I spent the last half of 2004 almost exclusively in the stock funds. Stocks struggled the first half of 2004, and took off the last half. Do you see the strategy? Get in when things look good. Get out when they don't.

Tom

Saraho,

As far as your statement that I am missinga lot, it is embarrassing to admit, but thetruth is thatyou are right. I am new to this and really trying to understand this a lot more. I appreciate your explanations. Where is it that you can view other member allocations? So let me ask you, as far as what Tomis allocating his portfolio, do you agree with the percentages or not?

Thanks for the welcome. As far as your statement about, "My, my, such tact! :x", I appreciate the sentiment, but the truth is Saraho was right, I do think I am missing a bit, I don't fully understand about TSP and the funds, but I am definitely interested and willing to learn. I appreciate your tips and will definitely look into what you suggested. Any more tips would be greatly welcomed. Thanks.

Tom,

Hello. Thank you for the welcome. I wanted to tell you that this is such a good site that you have here. For those of us out there that do not have much knowledge about TSP and investing in the different funds, your site is very beneficial and full of information. I have only briefly had the chance to go through what you are offering on this site, but this is such a help and giving me a better understanding of TSP. As far as my question of your current portfolio, I was curious about the 100% invested in the G Fund. Saraho briefly explained that it is not all about the current prices, which to be honest, is what I was under the impression that it was. To explain more, the past week or two, I have been making interfund transfers, previously from 70% in C fund and 30% in G fund to putting 5-10% in the S and I fund. The result being that my account balance has increased about $1,000. As opposed to one of my co-workers who just left her portfolio the way it was with percentages in C and G and therefore in the same time frame her account balance did not increase at all. So here is where I get confused, investing in the fund which has the highest price and increasing the percentage in those funds, thus increasing the number of shares has given me an increased account balance. Isn't this what we are all going after? To increase the account balance? What am I missing here in terms of that? So therefore, when I saw that you had moved 100% into the G fund and Saraho's comment that it is not all about the current prices, in fact that the current prices have no relevancy, has made me question even more what I am doing and that I do not have the proper knowledge in investing in these funds. After looking through your site and the information you have available, percentages invested in the different funds and the returns gained, Friday, I moved 100% into G fund. I figured, better safe than sorry, as this way I can't lose much. At least till I gain a better understanding, and plus I figured from what you and even others mentioned earlier as far as I fund looking good in January, but predicted to go down later on, the best bet looked to leave it in theG fund for now. The thing is, I am trying to understand, why this is. Why G fund, now, and why as you recently stated, onlya couple of days to a week? I will of course try to do as much research as I can, already I received a few helpful tips from some of the members of this site as from you, but any suggestions or tips would be greatly welcomed. Also, I saw that someone mentioned that the maximum interfund transfers was about 13, but I believe you said that last year you did a lot more than 13 transfers, is there any limit, presently can you do as many transfers as you want? Thanks again for the response, I look forward to hearing from you and the other members on this site.

Maxwell -
I currently know of no limitation on the number of transfers we can make in a year. I make many transfers during the year, but some of our members make double and triple the number of transfers I make. Not that I recommend a lot oftransfers, but I haven't heard of complaints yet.

As far as share prices go in determining which fund to choose, I agree with saraho. It does not matter to me. I don't even take that into consideration. What matters to me is where I think the funds may go in the days, weeks and months ahead. If a fund price is high and my analysis tells methat fund can continue to do well, I will stay in that fund. If the price is low, maybe things are changing and it is time to buy. Or maybe it still looks bad and will continue to be bad. It is not the price that tells me this. It is my market indicators.

I hope that helps some. The bottom line is, it is not where the price is now. It is where is it going next?

Now wait until you read about sentiment and contrarian thinking. That one will really confuse you.

Tom

Maxwell wrote:

Thanks for the welcome. As far as your statement about, "My, my, such tact! :x", I appreciate the sentiment, but the truth is Saraho was right, I do think I am missing a bit...

hehe...ever see the series Moonlighting?

Maxwell wrote:

"My, my, such tact! :x", I appreciate the sentiment, but the truth is Saraho was right,

Hi Max, welcome. Rolo had to say it, he's always poking Saraho's pigtails in the ink. Big crush that one. Now you're not missing anything :^. I can poke fun 'cause Rolo is a bud of mine.

Maxwell wrote:

Saraho,

As far as your statement that I am missinga lot, it is embarrassing to admit, but thetruth is thatyou are right. I am new to this and really trying to understand this a lot more. I appreciate your explanations. Where is it that you can view other member allocations? So let me ask you, as far as what Tomis allocating his portfolio, do you agree with the percentages or not?

Dear Max,

The section entitled Member Allocations, Transactions and Returnslists other people's allocations. The section entitled Allocation lists Tom's allocation. You will see that we all rarely agree. Currently Tom is 100% G, while I'm 50% I, 20% G, 15% S and 15% I. What that tells you is that Tom is taking a more conservative bent for the near future than I am.

Keep reading...and asking questions...

Tom,

Your explanation helps me out a bit, but doesn't fully explain why when changing the percentage of myallocations to the S and I fund within 1-2 weeks, why my account balance increased by doing that, as opposed to someone who had their allocations in C and G fund, made no change, and thus so no increase in the account balance. Also, what particularly made you decide to invest fully in the G fund now as opposed to having anything in the I fund presently.

Max