CHASING RETURNS

[garnertr]

Greetings,

LOVE THE BOARD! You all rock! I just wanted to say that and thank you for the wonderful site w/ such great discussions...now on to my question:

I've downloaded the spreadsheet from the financial tools and I've made my first update, and happy to say, lots of positives!

I've only made one transfer, so my spreadsheet looks like:

vs G Fund = 0.10%

vs F Fund = 0.48%

vs C Fund = -0.13%

vs S Fund = -0.43%

vs I Fund =0.56%

vs Div. Acct (20% each) = 0.11%
** vs 40% F, 60% Stocks =0.19%


However, should I use the above as a guide, for example, I Fund is .56%+, but S Fund is -.43%. Is this an indicator that the S Fund is going down and that maybe I should purchase?

I plan on making day-to-day Interfund transfers, so, if anyone has a suggestions, feel free to post...

THANKS!!!

[Birchtree]

Garnertr,

Honestly, and I say this with respect to your present position and situation, if you plan to do IFTs on a daily basis you will wear yourself out. You actually need, IMHO, many more years of aggressive and active accumulation of money. The first law of investing other than time is you need money to make money. Presently your allocations are set up to thin, you should concentrate your available funds on 2 TSP funds instead of across the board. That way if you hit a winner it becmes more profitable. As an example - with limited time in grade my selection would look like this: 75% C fund, and 25% I fund, with the same dollar cost averaging allocation. There just is no way around putting in more money than time permits. Now once you achieve substantial sums in your account it becomes more advisable to try the pistol game. Unfortunately when most participants achieve that $400,000 mark they begin to pull their heads into the G shelter. What a waste of power. Use this board to gain self confidence and knowledge and when you are ready - go make the dollars don't play with copper - collect silver. I apologize if I sound to presumptuous, I wish I had some one telling me what to do when I was younger- I'd probably be retired by now - oh well.

The Technician thinks that my strategy is aggressive and anyone who listens to me will end up like lambs to the slaughter. There is a Yogi and Chicken Little in every small town across this great country. Just don't believe their message of doom.

[garnertr]

Thanks for the information, unfortunately, I'll not see 400K for way too long, i've got 6-years left in the navy until I retire, I joined back in 1991 and didn't start TSP until 2001 (when it was first started).

However, I like the suggestion and will think about that... (75/25) and I'll be thinking more and more about future ideas...

though, as I preach to everyone @ work, INVEST NOW, I keep saying it over/over/over especially to our young military personnel, I keep telling them that if they start now, max it out and when THEY retire in 20-years, their TSP will be faboulous... unlike mine, I had only a few years to do as much as I could...

So thank you and thank you! No offense was taken ad none will ever be taken, I'm here to learn and to preach my education to others.!!!

Again, thanks!

[Birchtree]

Garnertr,

When you get out and find future employment - think about working for your Uncle- you'll be right back in TSP with the ability to maximize your contributions of over $20,000 a year - actually even more because starting in 2007, the $15,000 limit will be indexed to inflation and maybe by then you will qualify for matching contributions. I bet you can't wait to hit 50 - you get an extra $5000/year to contribute as the catch up. I think you are on the right track- I had a cousin who retired from the Navy and ended up working for the postal service - he now has a beautiful piece ol lake property in New Hampshire - sure knows how to make me jealous. Take carfe

[garnertr]

Yup, I'm getting there! I'm a CTA and I've been looking into working @ a SCIF. I have a TS clearance and it will be up-to-date upon my retirement (I can COUNT on that one).

So, I PLAN on working some-kind of government tie-in... and you can BET that I'll maximize whatever I can on that as well!

Just have to be patient and that I am not good at... :)

Thanks again,

[sugarandspice]

Take a look at the ones here who make the most transfers. go back and track theirprogress. I dont think you will like what you see. You need to have a set strategy and find opportunities in share price to exploit.You cant keep switching trying to catch your loss. It just wont work.

[pyriel]

sugarandspice wrote:
Take a look at the ones here who make the most transfers. go back and track theirprogress. I dont think you will like what you see. You need to have a set strategy and find opportunities in share price to exploit.You cant keep switching trying to catch your loss. It just wont work.You'll be suprise with what you'll see. They are actually doing better than long term holder. I should know, I track all of you...:^

[rokid]

Pyriel,

I'll have to respectfully disagree. Through May 2005, 78% of the TSPTalk traders achieved a lower rate of return than a passive 20% allocation to each fund. Unless June is very different, I'd say that sugarandspice has a valid point.

Incidentally, it might be interesting to see if there is a correlation between the number of ITFs and returns - up or down.

[SkyPilot]

I think it is likely that analysis will discover that neither a long term "buy and hold" or sentiment based market chasing will produce the best results. Buy and hold (2000-2003) may be just as disastrous as over guessing. One must be especially careful in a terror based economic climate.

A signal based trend system will likely enjoy much of the gains of an uptrend, and avoid the losses of a sustained downturn. A signal based trend system that is informed by events may do even better. Especially one that can be adjusted and improved over time.

The trick is to adhere to an approach, and avoid emotional based trigger pulling.Also, one must avoid too much market anticipation, as the market rarely does what we think it will.This will soon reveal itself as novice style gambling, and lead to wreck and ruin.

However, any approach must be evaluated on a longer scale than just a few months.

BTW, an equal 20% distribution of funds appears to have produced only a 1.32% gain since the beginning of the year... anyone beating that?

Ultimately, just another opinion :s

[pyriel]

rokid wrote:
Pyriel,

I'll have to respectfully disagree. Through May 2005, 78% of the TSPTalk traders achieved a lower rate of return than a passive 20% allocation to each fund. Unless June is very different, I'd say that sugarandspice has a valid point.

Incidentally, it might be interesting to see if there is a correlation between the number of ITFs and returns - up or down.




Rokid, not sure about that. Please provide facts by sending me a copy of everyone's track sheet so I can compare it with mine.:shock: I am currently tracking 25 people here and majority of them are long term posters.:^ For those who would like to receive everyone's track sheet on a weekly basis, please pm me your email...:dude: BTW, I am not saying that one way of investing is better than the other. But these guys tend to beat the average returns. They proved it last year and I am sure they'll prove it this year. This is the reason why I started tracking everyone so that I can see for myself and not guess which one is better than the other..:D

[rokid]

Pyriel,

I'm just looking at your TallyMay '05. You've tracked 14 individuals since the begining of the year. 3 beat the 20% each fund passive holding - G-man, Systemtrader,and Safetyguy. 11 didn't.

If you just consider the last three months,6 beat the passive 20% allocation, G-man, Safetyguy, TSPTalk, Citizen, Tekno, and Cowboy.13 didn't (68%).

[pyriel]

rokid wrote:
Pyriel,

I'm just looking at your TallyMay '05. You've tracked 14 individuals since the begining of the year. 3 beat the 20% each fund passive holding - G-man, Systemtrader,and Safetyguy. 11 didn't.
;-)... I see your point. Many have joined in since then and are doing well jumping. I feel confident that these jumpers will beat the average return by this year. :^ As for me, I should just stick with real estate...

[tsptalk]

rokid wrote:
I'll have to respectfully disagree. Through May 2005, 78% of the TSPTalk traders achieved a lower rate of return than a passive 20% allocation to each fund. Unless June is very different, I'd say that sugarandspice has a valid point.
It's no surprise that a diversified account will typically do better in a down market. It's those 30 and 40% years the diverifiers willnever see.

[mlk_man]

Have to agree with SP here. If you've followed me since June of last year, I did pretty well up until this year. Mainly because I tried to incorporate the "I" fund into the mix. Big mistake. This year anyway. If you look back at last year, the "I" fund was lot more stable than it has been this year. Meaning that once it started in one direction, it usually stayed that way for awhile. Not so this year.

I know that systemtrader would have a heck of a lot better return this year if he had been playing the C or S instead of the I as well. It happens. If the dollar had continued dropping, I'm sure we'd both be doing a lot better. When was the last time the S share price was more than the I? I lost 1% today thanks to it. :shock: The 5 years I back tested my system, each stock fund pretty much mimiced each other give or take a day or two.

I believe over time investment systems will out-perform buy and hold. What makes or breaks it is years where the market is down 20%. The big thing is to not sit in a down market and say "It'll be back up any day now". Before you know it, it's been 3 years. It's easy to trade on paper but when one sits in the G fund too long, they get antsy and make unadvised moves. I should know. It's natural to wanna get greedy and try to make more money. I'm sure Warren Buffet will tell you that it's the patient ones who win in the end. Just never been a good trait of mine. I'll learn.......

We each have our theories, strategies, or whatever. The main thing is we are here trying to do or learn "something" to make it grow or at least save it. If the market drops for 10 straight months and by being here makes you get out in 1 or 2 months, your ahead of the game. Many folks got out of the market today or recently. If today's events had made it drop 20% in the next few days, they would all being saying "Yes, I got out in time. No thanks to anyone but me". It's your money, do your homework and manage it. You'll never hear me telling you to stay in or get out. I'll give my opinion or what I'm doing, but ultimately it's up to you. I'm neither a bull nor bear. I'm a trend follower.

OH, I'm a "horser whisper" too....shhhhh.

Good luck all,

M_M

[SkyPilot]

Let us all sing together in harmony... all together now...

The Trend Is Your Friend!!! :^

[coolhand]

my 2cents...

It's way too early to make any meaningful determinations here. A traders market return average takes years to develop and many of us are too new at this to take the currentresults seriously. We are simply learning at this point. My education so far has paid dividends regardless of what my current results are for this year.

What's an education worth?

[ChemEng]

SkyPilot wrote:
BTW, an equal 20% distribution of funds appears to have produced only a 1.32% gain since the beginning of the year... anyone beating that?



Im sitting at 1.38% for the year right now... Not impressive, but it beats that 1.32%. Although Im showing the 20% allocation across all funds for the year to be at 1.61%.

[SkyPilot]

Got the 20% distribution #'s from Tom's page of comparative returns. Either way, equal distribution is not doing great, so it is just another of several fairly safe, but fairly low return approaches. Safe, unless we hit another secular bear market.

:s:s:s

[Sr]

What is an education worth? Now there seems to be confusion between price and value. Investment return is best measured in terms of price 'cause investing is made on the basis of price in the 1st place. Now sleeping well is a valueitem and a G fund investment made on that basis can be said to meet that goal. I take it that folks visiting here had something else or more in mind. For the most part, most of us missed remaining in 100% S fund YTD. Call this what you will butnot soing soremains a bad call for TSP investment in 2005.

[Pete1]

I have to agree with Tom on his point that 60/40 diversified portfolios will not garner the full gain of the leading index during short runbull markets, ie, 1-2 years. Diversified portfolios tend to capture long-termmarket averages if held and rebalanced over a number of years.Investors withlong-term, diversified, buy and hold allocation of 60 percent stocks and 40 percent never hit home runsin any given year but over time,these allocations have captured returns very close to the long-term marketindex averages with significantly reduced volatility as measured bystandard deviation. In other words,diversifiers are focused oncompound annualized returns over a number of years with the lowest possible volatility as measured by standard deviation. In other words, average returns, ie,doubles and singlesare okay :)

[tsptalk]

Sr wrote:
For the most part, most of us missed remaining in 100% S fund YTD. Call this what you will butnot soing soremains a bad call for TSP investment in 2005.

Very true. But we can't dwell on that. We can learn from it but the important thing is not what have we done, it's what are we doing now?

Welcome Sr, if I haven't already.

By the way, what are we doing now? :D

[rokid]

Sr wrote:
For the most part, most of us missed remaining in 100% S fund YTD. Call this what you will butnot soing soremains a bad call for TSP investment in 2005.

Sr,

The Efficient Market Hypothesis (EMH) states that it isimpossible to beat the market because prices, which for the most part are set by professional traders, already incorporate and reflect all relevant information. If EMH is true, and I haven’t seen or read anything that successfully refutes it, then none of us TSPers could have known that the S Fund would outperformall of the other funds YTD. In other words, don't beat yourself up formaking a bad call. No one can consistentlymake that call.

Consequently, unless you are Warren Buffet or Peter Lynch, the safe approach is to hedge your bets and invest passively in the TSP funds that represent the major asset classes, i.e. bonds, large caps, small caps, and international.

With a passive, diversified approach, you won’t get the highest return – 100% of the best performing fund gets you the highest return. And, you won’t get the worst return - 100% I Fund so far in 2005 does that trick. However, youshould get a good annualized return over time that beats inflation and reflects the growth of the U.S. and established international economies.

[Pete1]

68% currently trailing the passive strategy, interesting. I have read that roughly 70-80% of active institutional money managers do not beat the long run market averages and so, it appears that the active TSPers arein line with the averages. Granted, it is impossible to draw conclusions based on such a short time period but it is still interesting nonetheless.

[Sr]

TSP and other major asset class expsoure? Well, the "market" these days seem to favor real estate, utilities, oil, emerging market outside(not european per se)and sometimes even gold/ natural resources. C and S funds are exposed to these sectors to some extent ofcourse. Sadly not to the extent to make a dent in this type ofmarket. Patience is an underrated virtue.

[ChemEng]

ChemEng wrote:
SkyPilot wrote:
BTW, an equal 20% distribution of funds appears to have produced only a 1.32% gain since the beginning of the year... anyone beating that?



Im sitting at 1.38% for the year right now... Not impressive, but it beats that 1.32%. Although Im showing the 20% allocation across all funds for the year to be at 1.61%.



The gains from the past few days has pushed my YTD up to 3.63%, which is more than the 2.91% from the 20% in all allocation. :^

[rokid]

rokid wrote:
The Efficient Market Hypothesis (EMH) states that it isimpossible to beat the market because prices, which for the most part are set by professional traders, already incorporate and reflect all relevant information.
I can see that statement was a waste of electrons. I'll just stick with my passive allocation and we can compare resultsat the end of the year. :D

rokid wrote:
I can see that statement was a waste of electrons. I'll just stick with my passive allocation and we can compare resultsat the end of the year. :D
I wish you wouldn't feel that way, rokid. I've always valued your opinions.http://i3.photobucket.com/albums/y72/W_W/Smileys%20Animated/MOMMY_120.gif
http://i3.photobucket.com/albums/y72/W_W/WW.gif

[rokid]

WW,

I'm not upset. I was just trying to be funny.

What I'm doing is working for me. Hopefully, market timing is working for others.The rest is just a livelyexchange of ideas and investment philosophies.

However, thanks for your concern.

Here's to high returns for all TSPers. We deserve it.:^

rokid, http://i3.photobucket.com/albums/y72/W_W/Smileys%20Bubbles/WONDER15.gif