What to do?

[zenergy22]

Hello,

I am 24 years old, a civilian employee working overseas and have been investing in the tsp for about 2 years now. During the first year I only invested in the G fund with 8% of my pay being contributed. I am now contributing 10 % about $200.00 a month as follows:

50%- C fund

20%- S fund

20%- I fund

5%- F fund

5%- G fund

I do not have too much knowledge about the stock market and investing. My question to you is, am I doing the right thing?And if not; given my age, the amount I am currently investing, and the funds I am currently investing in; what would you do different? Please advise. By the way great website. I look forward to learning more and hearing from you.

[Rolo]

Welcome, zenergy!

What you are doing is a great buy-and-hold for retirement; you are doing the right thing. As you learn more, you may want to change your allocation a little.

The first thing I would suggest is to not put any in G--that is not an investment, but merely cash. Since your retirement is 18+ years away, you can fully invest. Put that 5% into the I fund instead.

[zenergy22]

I appreciate the information and advice. I have another question. Should I just leave my allocations the way they are for years or change them constantly. It seems to me if I invest the wayI am now for 18 yearsI should come out on top? What do youthink?

[Rolo]

Here's what you do: calculate it.

Look at the longest period of returns for each fund (somebody posted them here, saraho?), say 10 years. That is your average. Find an investment calculator that takes your expected rate of return * monthly contributions * 18 years. You will see, approxamately how much you will have. Convert that balance to an annuity earning 4-6%, then determine your monthly income from it.

The biggest part of this isto max your contributions unwaveringly and stay invested.

If you want to try to beat those averages, start of looking at the big picture, at what each market is doing in a broad sense; i.e. bonds are crap right now, so avoid them until things turn around (interest rates peak, then begin to fall again), or the dollar is falling, boosting I Fund returns.

You don't have to hypertrade to one-up the market averages...just avoid big or long drops like 2000-2002, most of 2004,and fully invest during run-ups like 2003 and the end of 2004. Start broad, then hone in to where you are comfortable.

[Spaf]

zenergy22 wrote:
Hello,

I am 24 years old, a civilian employee working overseas and have been investing in the tsp for about 2 years now.
50%- C fund, 20%- S fund, 20%- I fund, 5%- F fund, 5%- G fund

I do not have too much knowledge about the stock market and investing. My question to you is, am I doing the right thing?And if not; given my age, the amount I am currently investing, and the funds I am currently investing in; what would you do different?
Sounds like you hava good start. 24 years old, if only!!!!!!!!!!!

Don't do anything except for getting more knowledge. As they say knowledge is power!

Go to http://www.amazon.com Take a look at the books published by Suzy Orman. She has several good books out. While you are at amazon search the ______ for Dummies i.e., Trading for Dummies. I know "Dummies" sounds weard. But they get you started on the basics, generally unbiased, and then you can go from there.

This web site also has some recommended readings.

Edit>> Search the web for: The Dow Theory. This will give you a good prospective on how the market acts, and how to read it.

As a commercial says "I only hear from my broker when he wants to sell me something". Well I would suggest being your own broker so to speak. The NASD bubble and fall taught me one thing. Few people are going to be looking out for you. And when you get ready to retire, your generation will be talking a lot of money.

Rgds :) Spaf