Allocation vs. transfer strategies

**love-to-bike** · 10-31-2006, 09:53 PM

New member here - what a great site! For the last few years I just allocated my money in C-50, S-25 & I-25 & let it sit there. Wasn't a bad strategy - this year I'm up 13.55% (thanks for the spreadsheet Tom!). But actually this wasn't a strategy, I just set it up and forgot about it.

I understand the concept of allocation and feel comfortable making a few moves - probably staying for now in the same funds but moving some allocation around. Where I'm not so sure of is what to do with my existing funds. Is there a common strategy for transferring funds as well?

For example, do people transfer funds to follow their allocations? I imagine it might be based on how often you think you'll change allocations - my guess is if I do it more than 1x a week it would be out of the ordinary. It seems you should almost use the strategy to put your money where your mouth is - i.e. your allocations. But I can see that it could be risky as well, a wrong guess could leave you gasping.

So I guess I'm wondering if there is a clear strategy or do different people approach this differently? I'm a bit of a risk taker and take full responsibility for my actions but some insight here would be helpful.

Thanks!
Bob

**Show-me** · 10-31-2006, 10:15 PM

I’m not sure I fully understand what you are asking, so I will throw this out and see if it sticks. I send my payroll contributions to the G fund, 100%. I then IFT to my desired allocation depending on the mood and which fund is performing the best. Right now I am favoring a blend of S and I funds. When the I fund was kick’n butt I was sticking to one fund, 100%, when I IFTed. I make a lot of move so my G fund money is not sitting for very long and if my payroll contributions hit on a down swing I will IFT the same allocation as posted on my last entry.

Clear as mud!

**love-to-bike** · 11-01-2006, 12:13 AM

Originally Posted by Show-me

I’m not sure I fully understand what you are asking, so I will throw this out and see if it sticks. I send my payroll contributions to the G fund, 100%. I then IFT to my desired allocation depending on the mood and which fund is performing the best. Right now I am favoring a blend of S and I funds. When the I fund was kick’n butt I was sticking to one fund, 100%, when I IFTed. I make a lot of move so my G fund money is not sitting for very long and if my payroll contributions hit on a down swing I will IFT the same allocation as posted on my last entry.
Clear as mud!

Thanks for the reply - I think I see what you are saying. If I have it right, you allocate all your payroll to the G fund and then you use the interfund transfer feature to move the money to the fund(s) you feel will perform the best.

I guess what I was asking is do people have their payroll allocated directly to the funds they are backing? And your answer makes perfect sense, put it someplace then move it. Is this what most people do? I like it, as long as I'm paying attention & move the money out soon afterwards.

Thanks!
Bob

**Show-me** · 11-01-2006, 01:58 AM

Some buy and hold types will send their contributions straight to their fund or funds of choice. It is a "set it and forget it" system the utilizes dollar cost averaging (DCA).

**Birchtree** · 11-01-2006, 01:00 PM

Who rang my doorbell?

**pogo** · 11-01-2006, 09:37 PM

Originally Posted by Birchtree

Who rang my doorbell?

halloween was yesterday trick or treat but really when i get down on the market i read your post and try to stay ahead of the train

**love-to-bike** · 11-01-2006, 09:43 PM

Hey - as a followup - I went to my TSP account and made my first transfer this morning around 11:30am EST. Sorry for the newbie question - but wasn't that transfer supposed to be effective after 12:00 noon? Looking this afternoon I see the transfer has yet to occur - I remember getting a message that it might take up to 2 days, is this what I should expect?

Bob

**FUTURESTRADER** · 11-01-2006, 09:50 PM

Originally Posted by love-to-bike

Hey - as a followup - I went to my TSP account and made my first transfer this morning around 11:30am EST. Sorry for the newbie question - but wasn't that transfer supposed to be effective after 12:00 noon? Looking this afternoon I see the transfer has yet to occur - I remember getting a message that it might take up to 2 days, is this what I should expect?

Bob

it will be effective AFTER the close tonite. You'll be positioned for the open, tomorrow. The 2 day disclaimer is there, but I don't think it's ever been used. During one of the last holidays, it didn't get updated as normal, but the 'hotline' phone did have the update. You won't see the IFT in your account at least until after midnite tonite,..by 6 a.m. EST I believe it states on your account page.