Interfund Transfer 3/30 for 3/31/05

[tsptalk]

Since we have to make an early decision I am changing my allocation and gambling that we may be seeing a bottom here. If not close.

I will be going 50% C, 50% I fund (rather than 50% G, 50% I, which I reported earlier).

Sorry for the late change.

Tom

[tgrmike]

Wht not some in S Fund?

[Rod]

Tom, do you think the bottom already came yesterday?

Or could this just be a knee-jerk reaction to falling oil?

[tsptalk]

tgrmike wrote:
Wht not some in S Fund?
Rising interest rates.

[tsptalk]

Rod wrote:
Tom, do you think the bottom already came yesterday?

Or could this just be a knee-jerk reaction to falling oil?

If we didn't hit the bottom, it is close. I have mixed feelingabout the rally today. It looked impressive but I wasn't involved. I was hoping for something a little less enthusiastic. :?

[macdtrader]

Thanks for yourgreatcharts and your educational explanations of the stock market. You motivated metochange allocationsfrom 60% to 100% in "C" Fundeffective 12:01AM Tuesday. My timing was wrong and I lost money Tuesday but more than recovered what I loston Wednesday.Let's hopeTuesday wasa bottom for the S&P 500.

Currently I like "C" more thanthe "I"Fund since"I" gained nothingon Wednesday.Maybe theUS Dollar was oversold and is temporarily gaining strength due torising interest rates and foreign currency tradershearing talkof more aggressive tightening of the US money supply in the future by the Federal Reserve Bank.Thanks again for the great website.

[tsptalk]

macdtrader wrote:
Currently I like "C" more thanthe "I"Fund since"I" gained nothingon Wednesday.Maybe theUS Dollar was oversold and is temporarily gaining strength due torising interest rates and foreign currency tradershearing talkof more aggressive tightening of the US money supply in the future by the Federal Reserve Bank.Thanks again for the great website.

Hey mac -
One of the reasons I went into the I fund was that it sometimes has a big day the day after the US funds go up, so I was happy to see it didn't move Wed. I hope the dollar cooperates and let's the I fund do it's thing tomorrow. :)

[Rod]

tsptalk wrote:
Hey mac -
One of the reasons I went into the I fund was that it sometimes has a big day the day after the US funds go up, so I was happy to see it didn't move Wed. I hope the dollar cooperates and let's the I fund do it's thing tomorrow. :)
I believe it will. So far the world markets are looking pretty healthy for 31 Mar.

[JustICE]

Ok you posted this change at 10am or so.. I do not read the board untill I get home after 5pm. At that point is it to late to follow your sugestions?

[tgrmike]

Want rising interest rates have a reaction on the C Fund as well?

[Dogdaddy]

tgrmike wrote:
Want rising interest rates have a reaction on the C Fund as well?
Large Caps (C)are flush with cash, Small Caps (S)tend to operate on borrowed money.

[tgrmike]

Good point. Thanks

[tsptalk]

JustICE wrote:
Ok you posted this change at 10am or so.. I do not read the board untill I get home after 5pm. At that point is it to late to follow your sugestions?
You may be better off. There is a good chance there could be a test of the recent lows within a day or two.

By the way, I hate to call this "my suggestion". I like to say it's what I'm doing. You can take it for what it's worth. Some may not think that is much.

Also, can you get email during the day? You can join the email alert list which also goes out prior to the deadline. (see top right of www.tsptalk.com (http://www.tsptalk.com))

Thanks!
Tom

[tsptalk]

tgrmike wrote:
Want rising interest rates have a reaction on the C Fund as well?
Yeah, what Dog said, although the S fund may get a good bounce since it fell pretty hard. As a trade maybe some S would be good. As an investment the C fund because of those rates.

[tgrmike]

OK. But, the S Fund has out performed the C Fund 18.03 to 10.82 in 04 and 10.42 to 6.99 over the last 12 months. I Fund is kicking both>

[tsptalk]

So you think it should continue to outperform? That's fine. History suggests it (small caps) should slow down but anything can happen.

[tsptalk]

If we get a test of 1163, let's hope it's quick and followed by another rebound. I'm not sure I can stomach a 1% loss right now.

Longer term (2 to 3 weeks :)) the next move should be up so if we do get a retest, it shouldn't hurt too long.

[tsptalk]

tsptalk wrote:
If we get a test of 1163, let's hope it's quick and followed by another rebound. I'm not sure I can stomach a 1% loss right now.

Also, that is the problem with trying to play a retest. If the test is quick and a solid rebound follows, we could avoid the loss but miss the gain. That 1 to 2 day delay could hurt playing such a short time frame. I know. It happens to me often. ;)

[tgrmike]

I don't know if it will or not. Just trying to get some informed info to make some decisions. I'm planning on retireing in a couple of years and currently in I 50%, S 30% and C 20%.

[Rod]

tgrmike wrote:
I don't know if it will or not. Just trying to get some informed info to make some decisions. I'm planning on retireing in a couple of years and currently in I 50%, S 30% and C 20%.
IMO, your rather heavily invested for being only a couple years away from retirement. But then again, I do not know your risk tolerance.

You may want to enter the preservation mode, though.

[tgrmike]

I've got mixed feelings and have been thinking about it quite often. Some folks thinkyou still should think of it aslong term investing even when you retire. I'm one that kind of thinks in that mode. However, always looking for other ideas!

[Shaggy]

Tolerance is one thing. Another thing that should be considered is your age and health. If something does happen can you continue to work a few more years until the market recovers, are you going to retire and go back to work doing something else (full or part time), what percentage of your income will the TSP annuity be, things of this nature. For example, I am trying to reach a point were my TSP annuity will be about 70% of my income for the rest of my life. This would not include SS or my Gov annuity or previous employment annuities. This leaves me with a realistic comfort zone in risk. Even if the market does the 2000-2002 thing I could reasonable survive on 40 or 50% instead of the 70% I had intended.

[tgrmike]

I think about 20% of retirement will come from TSP. However, I only want to draw on the interest and try and keep the principle in tact. In order to do this I think you have to have some growth to your account.

[Shaggy]

Just remember with growth comes risk. There will be years when that interest is in the Neg range and can you afford to go without that 20% for that year.

[tgrmike]

Then it will just have to dip into the P. 20k is about 4% or less of P.

[pyriel]

tgrmike wrote:
I think about 20% of retirement will come from TSP. However, I only want to draw on the interest and try and keep the principle in tact. In order to do this I think you have to have some growth to your account.I think by hanging out here, you will do better than average (or at least get a return with no lower than average). Keep it up...

[tgrmike]

pyriel,

That sounds like a winner!

[MR CARLO]

Good article on the price of oil. You seem to be bullish, but think I still smell bear droppings. I will wait for positive upturn before getting back to stocks. The S&P500 seems to me like rising intrest rates will haveless effect. If oil spikes a ripple effect in commodities is certain.



http://money.cnn.com/2005/03/31/news/international/goldman_oil.reut/index.htm

[macdtrader]

You were correct about the move up in I Fund the next day. Today I visited http://www.stockselector.com and learned that the S&P 500 PE average is 30.5.WHEN PE'S ARE OVER 17.0, THE AVERAGE RETURN OF THE MARKET HAS BEEN ONLY 0.3% A YEARFROM 1927 - 2002. Also, we have the major market averages falling,the Federal Reserve Bank raising interest rates and Goldman Sachspredicting oil prices may rise to $105 per barrel.Imoved my fundstoG last Thursday at midnight since I am near to retirement and need to protect my capital. Goodluck to you and all other TSP investors.

[tsptalk]

macdtrader wrote:
Imoved my fundstoG last Thursday at midnight since I am near to retirement and need to protect my capital. Goodluck to you and all other TSP investors.
Not a terriblemove for someone close toretirement. Being safe is better than being sorry. This year couldbe shaky. I'm not sure I'd go 100% G but if you want to hold what you have, it's the only guarantee.

Also, The S&P 500 PE has not been below 17 since 1991.

[Spaf]

macdtrader wrote:
Imoved my fundstoG last Thursday at midnight since I am near to retirement and need to protect my capital. Goodluck to you and all other TSP investors.
Hey mac.....What time frame r you looking at, excuse me if personal!. PM OK! Just curious because we may be in similiar circumstances!

Rgds :) Spaf

[mlk_man]

macdtrader wrote:
You were correct about the move up in I Fund the next day. Today I visited http://www.stockselector.com and learned that the S&P 500 PE average is 30.5.WHEN PE'S ARE OVER 17.0, THE AVERAGE RETURN OF THE MARKET HAS BEEN ONLY 0.3% A YEARFROM 1927 - 2002. Also, we have the major market averages falling,the Federal Reserve Bank raising interest rates and Goldman Sachspredicting oil prices may rise to $105 per barrel.Imoved my fundstoG last Thursday at midnight since I am near to retirement and need to protect my capital. Goodluck to you and all other TSP investors.I believe I heard somewhere that the only reason Goldman Sachs said this is because they are heavily invested in oil right now? I think I heard this on Maryland Public Television.

[ou81200]

Welcome Back mlk_man. EOM :)

[mlk_man]

ou81200 wrote:
Welcome Back mlk_man. EOM :)Thank you ou81200! :^

[macdtrader]

I can retire anytime since Ihave theminimum retirement age and years of service. I ammore concerned with the return of my capital than the return on my capital but will tradethe F, C, S, or I Funds if anyone wouldkindly sharea trading stategy wheretherewards to riskratioishigherthanthe4.45% annual G Fund earnings. Best ofluckto all TSP investors and thanks for your suggestions!

[Spaf]

macdtrader wrote:
I can retire anytime since Ihave theminimum retirement age and years of service. I ammore concerned with the return of my capital than the return on my capital but will tradethe F, C, S, or I Funds if anyone wouldkindly sharea trading stategy wheretherewards to riskratioishigherthanthe4.45% annual G Fund earnings. Best ofluckto all TSP investors and thanks for your suggestions!

Here's my plan
R-R =60% G fund. Diversify40% C, S, & I. Play trading range cautiously. Monitor S&P, support:1163.86, resistance: 1202.12 go long or short at breakout. Establish trailing stops as necessary if there is a breakout up.

Capital preservation is 1st priority ;) Spaf

[macdtrader]

Thank you Spaf.I have 100% in G Fund now.If Icommit 40% into C, S and I at 12:00 midnight on Thursday, what is my exit strategy?Should I exit C, S and Iif and when then 1163.86support level is broken? If the 1202.12 level is broken, do I add additional funds above the 40% level?

[SystemTrader]

macdtrader wrote:
I can retire anytime since Ihave theminimum retirement age and years of service. I ammore concerned with the return of my capital than the return on my capital but will tradethe F, C, S, or I Funds if anyone wouldkindly sharea trading stategy wheretherewards to riskratioishigherthanthe4.45% annual G Fund earnings. Best ofluckto all TSP investors and thanks for your suggestions!

You can view other members' allocations here:

http://www.tsptalk.com/mb/forum21/ (http://www.tsptalk.com/mb/forum21/)

There are quite a few different styles (aggressive/risk averse, frequent or occasional moves, etc.). You may find one that suits your goals.

Also, a couple of folks do the admirable task of tracking the members' returns here:

http://www.tsptalk.com/mb/forum21/1422.html (http://www.tsptalk.com/mb/forum21/1422.html)

The helps you see how the different styles play out in different market climates (bullish, bearish, or flat/choppy).

Hope that helps,

John

[Spaf]

Mac.. I can tell you my plan..I don't advise.

Generally speaking one should hold off investing while in a fund / market is in a trading range. Could break up or down. When an up break out occurs let it confirm itself by waiting a few days. I never risk over 2% of total capital, nor stay in a fund that looses over 5%. It's too hard to make up!

If I was 100% G, I'd stay there until a positive break out :}. MHO!

[macdtrader]

Thank you very muchand congratulations on being Top Trader last quarter. By sharingsuccessful trading strategiesyou are helpingme and other TSP investors toa brighter future.

[macdtrader]

Spaf, thank you very much for sharing the details of your plan. I like your conservative approach to TSP investing and capital preservation. I stayed 100% invested G today sinceC,S and I all seemed to be dropping beforethetransfer cutoff. I will wait for a positive breakout as you recommended. Ihave notseen many bearish comments on this website butmy hunch isthata bear marketbeganin January 2005 for the C and S funds.

[pyriel]

SystemTrader wrote:

Also, a couple of folks do the admirable task of tracking the members' returns here:

All,

If you would like to receive everyone's tracker worksheet (they are all in one excel file), please pm me your email address. I'll try to make it a point to sendan updated one on a weekly basis (i'll try).I will usually send the workshet on a weekend so that people may get a compilation on where everyone is allocated before they start trading again on Monday market. The file is bigger than 10240bytes which is why I can't attached it here.

It is quite exciting and an eye opener when you see everyone's tracker side by side.

Pyriel

[Spaf]

Mac....Risk/Return

One of the TSPTalk members (Dave) who is good in math gave some of the risk/reward figures.
They looked good to me.
See what you think!

The risk/reward equation is illuminating. If the market goes up 10% on the year and you are 40% in the G-fund which pays 5%, you net (.4x5 + .6x10) = 8%. If the market goes down 10%, you net (.4x5 - .6x10) = -4%. You get 80% of the potential gain but avoid 60% of the potential loss.

If 60G then it works out to (.6x5 + .4x10) = 7%; or (.6x5 - .4x10) = -1%. You get 70% of the gain and avoid 90% of the loss.

Interesting!! :) Spaf

[macdtrader]

Spaf, thanks forsharing another great concept. Your analysis seems to be on the money. Let meadd another scenario to it. Suppose 2005is a year in whichthe SFund (or C or I) givesan investor aroller coasterthrillride but ends upflat or breaking evenfor the year. If he useda buyandholdstrategy,the G Fund willoutperformby 5% andhis opportunity cost for the thrilling ride was 5% plus theyear lost inhis questforfinancial freedom.Skillfulmarket timing or luckappearsto bethe only way to beat the current 5% return unless a new bull market similar to the 1990s begins soon wherewecan buy and hold C, S or I.

After this week'sstock market selloff, your planseems very prudent:Wait for an upwardbreakout oftwo days or more in the market averages. Withheavier trading volume, the breakout shouldindicate that professional/institutional sellershave stoppedtheir selling temporarily and arebuyingagain.

Atthe Dow Jones & Company website http://djindexes.com/mdsidx/index.cfm?event=showAverages (http://djindexes.com/mdsidx/index.cfm?event=showAverages),an interesting historicalchart of the Dow Jones Industrial Average (DJIA) is available free of charge under the "Dow data" column. The chartsshow that in the years1966 to 1982the DJIA ended close to where it began16 years earlier.There wereseveral bull markets and several bear marketswithin that timeframe.Also,sideways drifting markets were in vogue from 1897 to 1914 andfrom 1916 to 1942, punctuated withseveralbull and bear markets.

Perhaps 2000 to 2016 is anotherstock market period similar to the great, long term,sideways markets of the last 108 years.However, if TSPTalk Investors work as a team bysharing their best trading strategiesand investment thoughts, we can each select the beststrategies for our own situation, applythem, andreachfinancial freedomsooner. Thenit may not be importantwhat type of markets we experience.

Best ofluck toall TSPTalkmembers and thanks for the great ideas!

[Rod]

Hey Tom, although TSP still hasn't updated the share price section, you can still see the share price by clicking on your account balance.

G= 10.81

F= 10.44

C= 12.44

S=13.86

I= 15.39

God Bless:^

[tsptalk]

I keep forgetting that. Thanks Rod!