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czapor1967
02-09-2012, 11:01 AM
Hi everyone,

I'm new here and have really no idea of what to make of all the different methods of investing, I'm 45 now and plan on retiring at 68 and of course want to save as much as I can for retirement... I went to a Dave Ramsey financial class and he suggests to go 60% C, 20% S, and 20% I and just leave it there. is this a good thing to do or is there a method that is tried and true, or at least a method that's more consistent? I see the AutoTracker and see that most of the leaders are 100% in the S, what's a newbie to do? I'd love to learn about all of this... thoughts?

WhoDey
02-09-2012, 11:09 AM
Hi czapor ... I'm new too (joined in Jan) and was a bit overwhelmed when I first came to this site. My advice would be to take a deep breath and relax a bit. When I first came here I too saw that all the leaders were in S and immediately put in an IFT to make me 100% S. It didn't take too long for me to get nervous about that move because I didn't have an understanding for being in that position ... I was just following others. I backed off into a more conservative position and immediately felt better. Yes, I might miss some gains, but I felt better about reducing my exposure while I began to learn.

I suggest you take time to read the posts in the various account threads. I've learned a lot from doing just that. Not everyone agrees on what to do in a given situation, so you'll quickly learn that there is no magic allocation.

Be patient and learn. Even if you miss out on the current "magic allocation" ... there will be others.

Anyway, welcome and keep posting!

czapor1967
02-09-2012, 12:54 PM
Thanks WhoDey, I really appreciate your reply!

tsptalk
02-09-2012, 01:28 PM
Welcome czapor! There are many different approaches and buy and hold is one like Ramsey suggests, but it is risky because of the drawdowns, and we've had a couple of huge drawdowns in the last decade or so. That makes some of us nervous to be at the mercy of the market at all times.

WhoDey had some great advice so I would concur to just start reading and observing what others are doing, until you feel comfortable with an approach that works for you.

Good luck!
Tom

James48843
02-09-2012, 01:28 PM
Hi everyone,

I'm new here and have really no idea of what to make of all the different methods of investing, I'm 45 now and plan on retiring at 68 and of course want to save as much as I can for retirement... I went to a Dave Ramsey financial class and he suggests to go 60% C, 20% S, and 20% I and just leave it there. is this a good thing to do or is there a method that is tried and true, or at least a method that's more consistent? I see the AutoTracker and see that most of the leaders are 100% in the S, what's a newbie to do? I'd love to learn about all of this... thoughts?

Welcome czapor1967: Nice to have you here.


Please go to the start of this thread, and start reading from the first post.

The short answer is-....NO ONE on this board can or should tell YOU what YOU should do with your money. You have to decide for yourself what you are comfortable and what level of risk you are happy with, and ONLY YOU can make that decision. Nobody here has a financial advisor license, and as such, we cannot and should not advise YOU what YOU should do.

By the way- the "age appropriate L-funds" are basically designed to do , to some degree, something similar to what Mr. Ramsey suggests. That is to say- they are higher in stocks the farther you are away from retirement, and move the funds into lower risk assets as you get closer to retirement, and they do that automatically. If you don't know where YOU are comfortable with your money, then the TSP makes several pamphlets available that recommend using an age appropriate L fund.


Read THIS THREAD from the beginning, and you'll pick up that over time, you'll learn for yourself what investing style you are comfortable with, and that is the most important thing- that YOU know what you are doing, and YOU understand why you are doing it, and then YOU made the decision to do it.

Thanks- and good luck. It won't take long at all for you to learn and become much more comfortable with your own investment.

James48843
02-09-2012, 01:38 PM
Fund Comparison Matrix

The chart below provides a comparison of the available TSP funds. You can learn more information about each fund by clicking on the fund name. This is from the TSP's website:




G Fund (https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_G.shtml)

F Fund* (https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_F.shtml)

C Fund* (https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_C.shtml)

S Fund* (https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_S.shtml)

I Fund* (https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_I.shtml)

L Funds** (https://www.tsp.gov/investmentfunds/lfundsheet/fundPerformance_L.shtml)



Description of Investments

Government securities (specially issued to the TSP)

Government, corporate, and mortgage-backed bonds

Stocks of large and medium-sized U.S. companies

Stocks of small to medium-sized U.S. companies (not included in the C Fund)

International stocks of 21 developed countries

Invested in the G, F, C, S, and I Funds



Objective of Fund

Interest income without risk of loss of principal

To match the performance of the Barclays Capital U.S. Aggregate Bond Index

To match the performance of the Standard & Poor's 500 (S&P 500) Index

To match the performance of the Dow Jones U.S. Completion TSM Index

To match the performance of the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index

To provide professionally diversified portfolios based on various time horizons, using the G, F, C, S, and I Funds



Risk

Inflation risk

Market risk, Credit risk, Prepayment risk, Inflation risk

Market risk, Inflation risk

Market risk, Inflation risk

Market risk, Currency risk, Inflation risk

Exposed to all of the types of risk to which the individual TSP funds are exposed - but total risk is reduced through diversification among the five individual funds



Volatility

Low

Low to moderate

Moderate

Moderate to high — historically more volatile than C Fund

Moderate to high — historically more volatile than C Fund

Asset allocation shifts as time horizon approaches to reduce volatility



Types of Earnings***

Interest only

Change in market prices

Interest

Change in market prices

Dividends

Change in market prices

Dividends

Change in market prices

Change in relative value of currency

Dividends

Composite of earnings in the underlying funds



2010 Administrative Expenses****

0.025%

0.025%

0.025%

0.024%

0.025%

0.025%



Inception Date

04/01/87

01/29/88

01/29/88

05/01/01

05/01/01

08/01/05



* The F, C, S, and I Funds also have earnings from securities lending income and from temporary investments in G Fund securities. These amounts represent a very small portion of total earnings.
** Each of the L Funds is invested in the individual TSP funds (G, F, C, S, and I). The proportion of your L Fund balance invested in each of the individual TSP funds depends on the L Fund you choose.
*** Income from interest and dividends is included in the share price calculation. It is not paid directly to participants' accounts.
**** Expenses are offset by the forfeitures of Agency Automatic (1%) contributions of FERS employees who leave Federal Service before they are vested, other forfeitures, and loan fees.

MrJohnRoss
02-09-2012, 02:21 PM
Welcome czapor! There's a lot of very good information here, so you've found the right place to learn a bit about taking control of your TSP investments. After you've been here a while, I think you'll begin to get a feel for whether or not you want to follow some of us here who have timing systems, or just keep your investments in one of L Funds or in a mix like Ramsey says. There's also the paid services that you can take advantage of as well.

I like Dave Ramsey. My wife & I took his "Financial Peace" university course a few years back, which changed our financial lives dramatically. I don't agree 100% with everything he says, but for the most part he won't steer you wrong.

Best of luck to you!

John

nasa1974
02-09-2012, 03:01 PM
czapor, welcome aboard. This is a great place to learn and you have some time to make a real difference in your TSP. Read as much as you can and ask questions if you need some answers. Good luck.

nnuut
02-09-2012, 03:13 PM
Welcome to the Message Board, the Market has a tendency to change and when it does you can lose much money. We try and minimize the losses and maximize the gain, that is much better than just riding it out. Join in on the conversations and read, read, read.
Best of luck
Norman

czapor1967
02-09-2012, 03:40 PM
WOW!!! Thank you all for your replies, you've all made me feel welcomed here and I really appreciate it! I will heed the advice and continue reading... what a terrific website!

Chris

Fran1775
02-09-2012, 05:21 PM
I've been here about 3 weeks And have been patiently just holding back reading everyone's thread. I to am ready to get in and start learning as much as I can.

I have been moving money around the funds for about 5 years on my own and have been pretty successful but it's never too late to learn more and to get advice for the higher returns. It looks like everyone has the same go in mind.

czapor1967
02-13-2012, 10:53 AM
Hi everyone,

So as I checked the AutoTracker this morning I noticed quite a few people moving all into the F fund. can anyone tell me why? and how do people know when it's time to move into a different fund? sorry for the questions, but I really want to learn this stuff! :D

Chris

tsptalk
02-13-2012, 10:59 AM
So as I checked the AutoTracker this morning I noticed quite a few people moving all into the F fund. can anyone tell me why? and how do people know when it's time to move into a different fund? sorry for the questions, but I really want to learn this stuff!

When stocks go down (like they did Friday) and investors get more nervous, TSP'ers tend to turn to the G or F fund. The G-fund is a safe place with very limited upside potential. If stocks fall, the F-fund (bonds) tends to do better than G, and obviosully the stock funds C, S, and I. We've seen some cracks in some of the charts and indicators and this would be the "why".

Fear and greed run the market and after the drop on Friday we saw some of that fear.

MrJohnRoss
02-13-2012, 12:16 PM
Hi everyone,

So as I checked the AutoTracker this morning I noticed quite a few people moving all into the F fund. can anyone tell me why? and how do people know when it's time to move into a different fund? sorry for the questions, but I really want to learn this stuff! :D

Chris

Hi Chris,

Do you have a trading plan? Do you know when you will move your money from the stock funds into the safety of the G or F Funds, and vice versa? Unless you have a written, defined plan, you will only be guessing, or going on hunches, which will likely give you very poor investment results. My advice is to develop a plan that works for you, and stick with it. Over time, your plan may need to be modified, but at least you'll have an idea of when you should be moving your funds to maximize your returns.

A good place to track various TSPTalk members who have trading plans is over at RealMoneyIssues thread. He posts an Excel spreadsheet with the various plans, and their investment results on a daily basis. It's a good place to start.

Best of luck to you!

John

czapor1967
02-14-2012, 09:20 AM
Thank you both for your replies! I'm sure you can tell that I really have no idea about the stock market and how it works, so @MrJohnRoss sadly no I have no plan, I read threads on here and am slowly figuring some things out. but mostly I just kind of look at the AutoTracker to see what the majority is doing, I'm not very sure on the timing of things as far as when people have moved all into a fund and I move into that fund a day later. I don't know how that would effect me. So I'll keep reading threads and watching! maybe there's a book "stock market for dummies" or "tsp for dummies" that'd help! :laugh:

Thanks again!
Chris

nasa1974
02-14-2012, 09:41 AM
czapor, Start up your own thread in the "Members Account Talk" and you will get more responses to your questions. More members read that area than the new members area. Good luck and keep learning.