A Strategy?

Could someone tell me what the long-term effect would be of maintaining a constant amount in each of 3 stock funds by adding any earnings to the G fund? For instance, hypothetically:

C = 70000 when earnings go up 1% ($700) add the $700 to the G Fund

S = 47000 when earnings go up 1% ($470) add the $470 to the G Fund

I = 35000 when earnings go up 1% ($350) add the $350 to the G Fund

[Spaf]

WW You are removing any potentially compounding profits.

Thanks Spaf. Is there nothing to be said for keeping all earnings and not suffering losses?

[Spaf]

Not really, sometimes I go light too! There is a lot of variations. If you are comfortable with it then its good. If you stay awake nights, then you may need to try something else. How does that sound?

[tsptalk]

Wonder Woman wrote:
Thanks Spaf. Is there nothing to be said for keeping all earnings and not suffering losses?
I agree with Spaf. We've talked about Einstein'sstatement aboutcompound interest being the human race's greatest discovery (or something like that).

Thanks Spaf and Tom. I’m new at watching these TSP numbers. Your advice sounds sensible and solid. I just haven’t decided yet how to play/manage my account.

[Mike]

G and F are only useful under the following circumstances:

1. A bear market: in 2000-02, you'd be better off grabbing the mediocre gains from these funds than eating double-digit losses in stocks.

2. A cycling market (like we have now): when the market heads down, move all your stock holdings into G or F (or perhaps both). When the market bottoms out, move back into stocks. I'm just trying to buy within 10 cents of the lows and sell within 10 cents of the highs. If I can manage that (particularly for the S and I funds due to their wider ranges), I should do pretty well. The C fund has the narrowest range of the three stock funds by far, so it's tough to make money on it 'til it breaks past its 2004 high. I think it'll do that in November, which is why I'm 50% in that fund.

[Spaf]

WW
We have all been in your place. I'm a novice to the stock market, not a professional trader, and so are a lot of us, but we learn, and from each other. See the site www. stockcharts.com. Learn The Dow Theory. Read the book Mutual funds for dummies. Generally, educate your self, and guess what; you will be the best investor there is. It just takes a little time and learning, besides that, it's also a lot of fun, and you make money in the mean time! Have a good day. And be careful out there. ;)

[Dakota]

Spaf wrote:
WW
We have all been in your place. I'm a novice to the stock market, not a professional trader, and so are a lot of us, but we learn, and from each other. See the site www. stockcharts.com. Learn The Dow Theory. Read the book Mutual funds for dummies. Generally, educate your self, and guess what; you will be the best investor there is. It just takes a little time and learning, besides that, it's also a lot of fun, and you make money in the mean time! Have a good day. And be careful out there. ;)


Spaf, thanks I needed that info too

Spaf and Mke,
Both of your notes are encouraging and supportive and I appreciate that.
I just used your forum to make my first ‘market timing’ move. Yesterday I moved the percent I had in the S Fund to the F Fund I did well (3 Funds +/x3 consecutive days) from this transfer. It will definitely have to be classified as ‘beginner’s luck!”