Day Trader or In For The Long Haul?

[Bruceaz]

Hi!

First time to post. I am sure someone has rasied this before but wasn't sure how to search the posts for this specific topic.

I am trying to get a sense of direction with my TSP fund. Have been in it very aggressively (100% C) for 20+ years and have accumulated a sizeable nest egg. I have six years before I can retire.

Currently at 70-0-20-10.

Some have advised me to become a "day trader" and move my funds back to G when I see the need. Then whenI think things will perk up, move them back to take advantage of the "ride up."

Others tell me this approach is a big mistake that I should have a balanced approach, leave things alone, and over the long haul, I will get better performance. They say this is how you "catch the next big ride up!"

Can use some advice from of you experts out there!

Day Trader or Long Haul?

Bruce in Arizona

[smine]

Welcome, Bruce. If we could all predict exactly what would happen we would love to "day trade or market time." I have tried to jump in when the markets go low; then they go up or lower. Believe me, when you put in your allocation on payday, then watch it swallowed up, it will causes alarm and ruins your weekend. Being out in G when it goes up is also a drag. Sounds like you want to preserve your tidy nest but still play the game. There's money to be made if you can predict. This week everyone said gloom and dome.....it wasn't at all and some have done well. I suggest a conservative approach you can live with if it is lost. Pyriel tracks different folks; some do better than others. See for yourself who does well and who doesn't.

The folks that did not make moves during the last fed tightening schedule are still down in index funds going on six years later.

Just look at a chart of the 500 and Naz.

This week was quad witch week. Tuesday WMT and GM was short covering on a horrible retail sales report. Today was short covering on a horrible regional manufactoring sector report. This week is a double edge sword. Some of us like to play it safe. We were wrong but we also were able to sleep. :P But were we? Lets see what tomorrow brings? :D Everyone things everything will be bad and the market went up - now everyone things all is grand. Hmmm. Tom talks about the opposite reaction and so do I. :^

Now we have to ask? What day is end of quarter window dressing/mark up rallythis quarter?

The market under the market.

Good luck! :)

http://chart.finance.yahoo.com/c/5y/_/_ixic

http://chart.finance.yahoo.com/c/5y/_/_gspc

Actually all this excitement.

The market has gone NO WHERE this year. Just look at the above charts.

Flat lined. :shock:

[Birchtree]

Bruceaz,

My question back is why change a plan that is already working for you - you own a nice piece of Americana in the C fund. I'm 100% C fund and plan to sit right there until the sp500 gets to 1600 - then I'll start to lighten the load on the way to 1700.

So much depends on your time horizon - I'd hang on my TSP even in retirement and keep the mojo working. It's all up to you how you make or conserve.

80% of the earnings from C fund come from overseas.

[Bruceaz]

Thanks To Everyone that Replied:

I appreciate the advice. :^

I think I will employ a CFP to help me with this and go with the "Long Haul" - easier on the brain and nerves.

I am surprised there are not more CFP's that "specialize" in federal employees with FERS. Would be a good market, ya think? :shock:

Bruce

[Spaf]

Bruceaz wrote:
Thanks To Everyone that Replied:

I appreciate the advice. :^

I think I will employ a CFP to help me with this and go with the "Long Haul" - easier on the brain and nerves.

I am surprised there are not more CFP's that "specialize" in federal employees with FERS. Would be a good market, ya think? :shock:

Bruce

Bruceaz ... From the 1980's to 2000 the market was great for the long haul. In 2000 we had the burst of the NASD bubble. The market changed and went into choppy time frames; thus the market after 2000. The old investment strategy didn't work so well, thus the ensuing position traders and swing traders added to the few day traders. Each trade strategy is somewhat different. The problem with the post 2000 market is that most investors are not educated in how to manage theirfunds. This education is available. However, IMHO,... the outside financial folks deny investors this information because they want to stay in business. Fund managers have a life style that they need to protect.

Federal employees can go with a broker, buy their loaded mutual funds. Get a annuity from a bank financial advisor, and other such options if they chose to let others handle their funds.

You raise a good point. Why doesn't TSP have a CFP that specializes in federal employees?

Now days it seems that there may be few options. The rule seem to be that investors manage their own funds or pay the price. The exception being the big guys and galsthat get the special treatment, and sometimes get caught.

Have fun out there! Rgds! :) Spaf

[tsptalk]

Bruceaz wrote:

Some have advised me to become a "day trader" and move my funds back to G when I see the need. Then whenI think things will perk up, move them back to take advantage of the "ride up."

Others tell me this approach is a big mistake that I should have a balanced approach, leave things alone, and over the long haul, I will get better performance. They say this is how you "catch the next big ride up!"

Welcome bruceaz!

This has been discussed quite a bit and it is a great question. Here is the link to one of those discussions... http://www.tsptalk.com/mb/forum6/644.html (http://www.tsptalk.com/mb/forum6/644.html)

I'm not a big fan of hiring an expensive professional. Their fees will cost you a chunk of your returns and they are likely to just tell you to diversify. Not a bad strategy but why pay for that advice? There is plenty of good free info out there in my opinion.

Thanks for joining us!
Tom

[biggdog1]

Bruce I've made this comment before. I think it depends on if you're FERS or CSRS. I'm CSRS so my retirement is set. My TSP is extra so I'm willing to take the ride now ( I'm retiring Dec05 or May06 - 37+years service). Take care and watch these guys, they have helped me a lot.

[Bruceaz]

tsptalk wrote:
This has been discussed quite a bit and it is a great question. Here is the link to one of those discussions... http://www.tsptalk.com/mb/forum6/644.html (http://www.tsptalk.com/mb/forum6/644.html)

Hi Tom:

Thanks for taking the time to respond. I just KNEW this topic was somewhere! Couldn't figure out the magic search words for a (repeated, I think many times) question!

I am playing hookie today as I watch the US Open. :D I will go through your past posts to get "educated."

Regards,

Bruce "I should be at work" in Arizona

[Bruceaz]

Birchtree wrote:
Bruceaz,

My question back is why change a plan that is already working for you - you own a nice piece of Americana in the C fund. I'm 100% C fund and plan to sit right there until the sp500 gets to 1600 - then I'll start to lighten the load on the way to 1700.

So much depends on your time horizon - I'd hang on my TSP even in retirement and keep the mojo working. It's all up to you how you make or conserve.

Thanks for the advice. I switched all of my TSP funds to the G in mid-2001 after being 100% C since being hired in 1984 as a FERS. (I was one of thosepeople given the option of CRS or this new crazy thing called TSP that would make me rich! :P)

I have always socked away as much as they will allow me as I realized this was my real retirement fund. I just recently went out of the G into higher risk (and yield) investments as I think the timing is right. BecauseI never thought about "allocation" or investments or strategy, I am seeking advice and help to guide me until retirement.

I appreciate all the comments and suggestions. Good food for thought.

Bruce in Arizona

[Shaggy]

Just remember this is a daily thing. If you are going to get away from straight diversification and really try to make some moves to maximize profit then it takes time and energy. Nothing is free!! I had my TSP diversified the first three years and did fine. This is the first year I have started to make moves. Thanks to Tom's spread sheet he provided I can see that I have done much better then my previous diversification plan and in fact better then any single fund. Of course that could change tomarrow! If you have the time and interest it is probably worth it, if not then the advisers are probably right just diversify.

[Aggie76]

I've been looking a the new L-Fund that will be offered this summer. From what I can tell, TSP will hire two firms to



Cut from the following link.

http://www.tsp.gov/curinfo/specint/LFC-Qs&As.html

5. http://www.tsp.gov/resources/top.gif (http://www.tsp.gov/curinfo/specint/LFC-Qs&As.html#top)

The Federal Retirement Thrift Investment Board has hired, through competitive procurements, two firms to advise it on the development and implementation of the TSP lifecycle funds. Mercer Investment Consulting, Inc., is developing the asset allocation models for the funds, while CitiStreet LLP will help devise communications materials for the funds.

6. http://www.tsp.gov/resources/top.gif (http://www.tsp.gov/curinfo/specint/LFC-Qs&As.html#top)

Based on Mercer's recommendations, the TSP has decided to offer five lifecycle funds, collectively referred to as the "L Funds":








L 2040, with a horizon date of 2040




L 2030, with a horizon date of 2030




L 2020, with a horizon date of 2020




L 2010, with a horizon date of 2010




L Income, for participants who are already withdrawing their money or who are just about to begin withdrawals