Transfer balances to L?

[DaveTSP]

Recently shifted to 100% L2020, should I transfer my existing G and F balances to L2020, or leave them where they are?

[SkyPilot]

Recently shifted to 100% L2020, should I transfer my existing G and F balances to L2020, or leave them where they are?

Your question is confusing to me... If you shifted 100% to the L fund, you should not have any left in the G or F fund, correct? Maybe you meant 100% of your balance that was not in the G or F fund?

In any regard, your question regarding how you allocate your investments depends on your retirement horizon, risk tolerance and income needs in retirement. It also depends on what you believe the market will do next, and if the L funds are the right vehicle for you.

Given that, the L funds were supposed to be designed to rabalance your entire portfolio on a daily, automatic basis without regard for market conditions or any thoughtful managament of the funds. This year that could be good, in previous years, maybe not so much.

However, for some (maybe most) the L funds will produce a greater return than those who attempt to devine the markets mysterious ways.

Ultimately, the decision is yours. The best we can do is advise you to read, study and participate in discussions to develop the best strategy you can to optimize your earnings.

Good luck, and good investing! :)

[DaveTSP]

Thanks SkyPilot, I'm sure I'm probably phrasing the question wrong. Prior to shifting 100% of my allocation to the L fund I was dividing it 80/20 between the G and F fund (been that way for more than 10 years). My question is would it be a good idea to move my existing G and F balances to the L fund or leave them where there at?

[SkyPilot]

Thanks SkyPilot, I'm sure I'm probably phrasing the question wrong. Prior to shifting 100% of my allocation to the L fund I was dividing it 80/20 between the G and F fund (been that way for more than 10 years). My question is would it be a good idea to move my existing G and F balances to the L fund or leave them where there at?

Then that really depends on what you believe the market will do. The L2020 is more aggressive than your previous strategy. Typically, the longer you have until you need the money, the more aggressive you should be. If the L2020 is producing acceptable results, then go all in if you are comfortable. However, if you are going to need more than the L fund is projected to return at retirement, then maybe split it up between the L2020 and the L2040 or split some portion up in the C,S or I.

What is acceptable risk and needed return?

[DaveTSP]

Have to admit, as if it wasn't obvious, that I'm pretty clueless here. Looking at retirement in about 20 years, so hopefully trying to maximize my return using the L fund. No where near smart enough to try and manage on a day-to-day basis myself.

[Guest2]

Have to admit, as if it wasn't obvious, that I'm pretty clueless here. Looking at retirement in about 20 years, so hopefully trying to maximize my return using the L fund. No where near smart enough to try and manage on a day-to-day basis myself.

Dave, If I may be so bold to share my view.
With 20 years ahead of you, your definately on the right track.

When you have money in the L-Fund, they will spread your money out to
all tsp fund, including the G. L-Income has the largest % amount in the G.
Where L2040 has less % in the G and more % in the risker stock & bond
funds.

If you have been allowing your Future Contribution Allocations to go in the
G&F, your simply adding to the % of your portfolio already in those funds.
I put future contributions in the G Fund for tracking purposes. But if I was
just starting out and decided to put my money in the,,,say,,,L-2040,,,then
I would change my Future Contribution Allocations to L-2040 as well.

What ever L Fund you ultimately decide on, the only reason to put your
future money into a G or F is; to accumulate (more then already have
with the L Fund) to be safer and less exposed to future risk.

IMO, for me; I would do an Interfund Transfer into an L-Fund of choice.
Then, do a Change of Future Allocations to the very same L-Fund.
ie.......100% L-2040 for both.

I only had enough time to skim over the thread and hope I might have
answered a question or two. If I'm off base, please accept my appology.
And as always, read my signature closely.

[SkyPilot]

Dave, it is no shame to ask even what may seem an obvious question. If it were really easy, then this board would be populated with millionaires. Hopefully, many will reach that goal as they approach the time when they will need the funds.

Another approach is to continually add to a particular spread of investments through the ups and downs of market cycles, e.g., "DCA" (Dollar Cost Averaging). Do a search of "DCA" in this forum and you will find much discussion in this regard. Some see this as the gold standard of investment approaches. Many studies seem to affirm the logic of just such an approach.

However, the L funds don't really adopt it, as they are daily rebalancing to become more conservative.

[DaveTSP]

IMO, for me; I would do an Interfund Transfer into an L-Fund of choice.
Then, do a Change of Future Allocations to the very same L-Fund.
ie.......100% L-2040 for both.

That was basically my question, just wasn't using the right terminolgy I'm afraid. My allocations (starting this pay period) are 100% L2020. My previous allocations were 80/20 G & F funds, so it was that balance I wasn't sure what to do with (leave alone or transfer to the L2020). Thanks squalebear.

[Guest2]

That was basically my question, just wasn't using the right terminolgy I'm afraid. My allocations (starting this pay period) are 100% L2020. My previous allocations were 80/20 G & F funds, so it was that balance I wasn't sure what to do with (leave alone or transfer to the L2020). Thanks squalebear.

Your most welcome, as Shypilot eluded to below, there's a lot of information to be had on this web site, take full advantage of it.;)

[SkyPilot]

Your most welcome, as Shypilot eluded to below, there's a lot of information to be had on this web site, take full advantage of it.;)

Hmmm.... No one has ever referred to me as "Shy" before. :D

[nnuut]

Hi SP, nice to hear from you again, been on any other trips? Enjoyed your CD of the last one.:D

[James48843]

Dave:

What you decide to do with your existing TSP balance ultimately is up to you. You have to decide what your level of tolerance for risk is, and, with it, the potential reward that you can gain.

TSP puts out information that recommends an "age appropriate balance". Since no two people are exactly alike, you have to look at your own situation, and make an informed and concious decision about where you want to be in the markets.

Some people would say put it all into stocks, expecially if you have a long time before you are going to need to tap it, because over long periods of time, stocks have done well in the past.

Others say you should only put some of it in stocks, with the balance in other places.

I tend to keep most of my own TSP funds always in stocks- although I do actively manage my own, and sometimes move to the sidelines of "G" of "F" as protection against loss. That's because I am watching the markets, and trying to manage my own money.

Statistically, the L funds have performed very well over the short time they have been out there. They tend to work in both up markets- to build wealth, and, in down markets, they offer some protection compared to a straight stocks only-play. TSP has several web pages where they encourage an "age appropriate" approach, where you invest in the L fund alingned with the time frame you plan to take out the money- i.e. if you are not going to need anything until the year 2040, that would be the age appropriate L fund to be in, according to the TSP website.

What you decide to do is...up to you, not us.

So to sum it up- you won't find anyone here who will tell you what to do. We can't, because we are not finanical advisors. You have to make your own decisions about your own level of risk, and your own time line before you need the money.

Hope that helps answer your question.

[Guest2]

Hmmm.... No one has ever referred to me as "Shy" before. :D

oPPPPPs ! Spelling Check !

[Silverbird]

Technically, L funds have not been tested for downturns, as they were developed in reaction to the 1999-2001 tech bubble. I have not seen an analysis of how they would have fared during that period (and am not sure if it is possible to do an analysis since L-Year funds increase their shares in conservative funds over time until reaching L income rates and for a long time we only had G and C so again analysis may be impossible).

My 2 copper plated cents on L funds is there is no sense jumping full bore into the more equity heavy (L2040/L2030) funds until a good entry point for stock buys. Earlier, only G and F were making profits. Now though, there is question if equities have reached their bottom and are ready to go up. Being a very carefull birdeen, I'm not ready to launch yet.

[luv2read]

Rokid did some testing for that awhile back. See here:

http://www.tsptalk.com/mb/showpost.php?p=145785&postcount=98


Technically, L funds have not been tested for downturns, as they were developed in reaction to the 1999-2001 tech bubble. I have not seen an analysis of how they would have fared during that period (and am not sure if it is possible to do an analysis since L-Year funds increase their shares in conservative funds over time until reaching L income rates and for a long time we only had G and C so again analysis may be impossible).

My 2 copper plated cents on L funds is there is no sense jumping full bore into the more equity heavy (L2040/L2030) funds until a good entry point for stock buys. Earlier, only G and F were making profits. Now though, there is question if equities have reached their bottom and are ready to go up. Being a very carefull birdeen, I'm not ready to launch yet.

[Frixxxx]

Technically, L funds have not been tested ....


Rokid did some testing for that awhile back. See here:

http://www.tsptalk.com/mb/showpost.php?p=145785&postcount=98

My 2 copper plated cents on L funds is there is no sense jumping full bore into the more equity heavy (L2040/L2030) funds until a good entry point for stock buys. Earlier, only G and F were making profits. Now though, there is question if equities have reached their bottom and are ready to go up. Being a very carefull birdeen, I'm not ready to launch yet.

Well, hmm....I NEVER tell anyone to go to the L funds unless they seriously hate looking at the markets. I use that resource to show how "little" action there actually is in the "L" fund. I show them risk versus return. I will probably go to the L when I can't move my fingers across a keyboard.

The bodybuilders have it right - "No Pain, No Gain!":cool:

[DCguy]

things have changed since the introduction of IFT restriction. I'm starting to think L2040 is a good choice.

[Frixxxx]

things have changed since the introduction of IFT restriction. I'm starting to think L2040 is a good choice.

Well, If you just take the match from Uncle Sam and do that infommercial "Set it and forget it" you could use it as your safe haven. But then again, a glance at the fund returns shows that the "G" fund returned better than any "L" fund last 12 months. Also, not much more the last three years. With the IFT limitation, you could still protect gains. I just hate not maximizing my returns. If you didn't want to "play" the game, then maybe but it really comes down to your personal prefeerence.

But aggressiveness for me is NOW....I got 17 yrs to go.

$0.04 (with interest):cool:

[luv2read]

things have changed since the introduction of IFT restriction. I'm starting to think L2040 is a good choice.
exactly the way they want you to think. And all feds within 5 years of retirement, think L Income. Good little sheeple!:blink:

[Frixxxx]

exactly the way they want you to think. And all feds within 5 years of retirement, think L Income. Good little sheeple!:blink:


Sheeple = 3.9 million TSP pariticpants - 3100 TSPTALK participants

http://www.tsp.gov/forms/financial-stmt.pdf

Reread these financial statements and ask the same questions I did:

1 - From 2006 to 2007 Investment Expenses down
2 - Contributions up
3 - Insurance quadrupled?
4 - Administrative expenses down
5 - Liabilities down

Why did insurance get so high? What does that insurance buy us? Did they allocate 4.3 million to pay 273,000 what is up with those insurance numbers? I need a class, but it seems to me that we are seeing some weird calculations. I can't wait to see the 2007-2008 comparison.:cool:

[SkyPilot]

Hmmm.... No one has ever referred to me as "Shy" before. :D
bump

[SkyPilot]

Hi SP, nice to hear from you again, been on any other trips? Enjoyed your CD of the last one.:D

Will return to Ukraine this fall (4th trip).

Not much to say, as I haven't changed allocation in 4 months... Just cannot figure this market out, and now that I can't move in a meaningful way, it just sucks.

That's the way it goes...

[nnuut]

I know what you mean!! Best of luck on your next trip!:D
Norman