Spaf
08-10-2007, 01:18 PM
The Lilly Pad Report
August 10, 2007
TSP and Risk vs Reward
Tsptalk had a very good commentary paragraph about retirement risk, see August 10, 2007.
TSPTalk has members with three basic investment styles: buy-an-holders, position traders and swing traders. The site does not have any professional financial advisors except for Rev. Shark in the premium services. The site is generally government employees learning how to manage their TSP accounts. We have folks that are quite knowledgeable about the stock market and some somewhat knowledgeable, and others just starting out.
The subject of risk versus reward needs to be understood, very closely. As Tsptalk said in your latter years you don't have the luxury to recover a serious loss.
Lets take a look at the L-Funds and for a minute consider that we are all buy-an-holders. The objective of the L-Funds is Growth and the Preservation of Assets.
Fund.......Yrs to retire......% in C,S,I-Funds
2040.......28+ ................83
2030.......27-18..............73
2020.......17-08..............62
2010.......07-01..............41
L-In........<1 yr...............20
TSPTalk also has some long term allocations options, they can be found at this link: http://www.tsptalk.com/longer_term.html
TSPTalk members that trade have 3 basic handicaps at various degrees: First is the experience level, we are government employees and not professional traders. Second is the trade delay of 1 to 2 days, we can't make instant trades with an intrafund transfer. And third we are dealing with a retirement account which is just not some extra money.
To recover from losses. A loss of 5% requires a 5.2% gain. A 10% loss, a 11.1% gain. A 25% loss, a 33.3% gain. A 50% loss, a 100% gain.
A reputable internet broker can provide insights and research, instant trades, and you are not messing with your retirement account.
In the TSPTalk mission statement "We do this by allocating our assets into the funds which have the highest probability for capital preservation and greatest possibility for increased returns." In short it says we each need a plan to personally manage our funds. If you are going to buy-an-hold, the L-Funds are profesionally managed or TSPTalk long term has several options. If you are going to trade funds (swing or position) you need to know market fundamentals and the analysis of stock charts, and such items as over-bought, over-sold, trends, and etc. You need to really consider capital preservation versus risk.
It's OK to see what TSPTalk says, what Ebbnflow says, Trader Fred, Rev. Shark, and various board leaders, but I don't follow them. I'm retired, so I have my own plan of risk and reward. There are some members that have accounts with huge buffers. However, if you are not one of these, you need to be very considerate with your TSP funds.
So, be careful out there.
Rgds
Spaf....:)
August 10, 2007
TSP and Risk vs Reward
Tsptalk had a very good commentary paragraph about retirement risk, see August 10, 2007.
TSPTalk has members with three basic investment styles: buy-an-holders, position traders and swing traders. The site does not have any professional financial advisors except for Rev. Shark in the premium services. The site is generally government employees learning how to manage their TSP accounts. We have folks that are quite knowledgeable about the stock market and some somewhat knowledgeable, and others just starting out.
The subject of risk versus reward needs to be understood, very closely. As Tsptalk said in your latter years you don't have the luxury to recover a serious loss.
Lets take a look at the L-Funds and for a minute consider that we are all buy-an-holders. The objective of the L-Funds is Growth and the Preservation of Assets.
Fund.......Yrs to retire......% in C,S,I-Funds
2040.......28+ ................83
2030.......27-18..............73
2020.......17-08..............62
2010.......07-01..............41
L-In........<1 yr...............20
TSPTalk also has some long term allocations options, they can be found at this link: http://www.tsptalk.com/longer_term.html
TSPTalk members that trade have 3 basic handicaps at various degrees: First is the experience level, we are government employees and not professional traders. Second is the trade delay of 1 to 2 days, we can't make instant trades with an intrafund transfer. And third we are dealing with a retirement account which is just not some extra money.
To recover from losses. A loss of 5% requires a 5.2% gain. A 10% loss, a 11.1% gain. A 25% loss, a 33.3% gain. A 50% loss, a 100% gain.
A reputable internet broker can provide insights and research, instant trades, and you are not messing with your retirement account.
In the TSPTalk mission statement "We do this by allocating our assets into the funds which have the highest probability for capital preservation and greatest possibility for increased returns." In short it says we each need a plan to personally manage our funds. If you are going to buy-an-hold, the L-Funds are profesionally managed or TSPTalk long term has several options. If you are going to trade funds (swing or position) you need to know market fundamentals and the analysis of stock charts, and such items as over-bought, over-sold, trends, and etc. You need to really consider capital preservation versus risk.
It's OK to see what TSPTalk says, what Ebbnflow says, Trader Fred, Rev. Shark, and various board leaders, but I don't follow them. I'm retired, so I have my own plan of risk and reward. There are some members that have accounts with huge buffers. However, if you are not one of these, you need to be very considerate with your TSP funds.
So, be careful out there.
Rgds
Spaf....:)