Losing money?

[AFMark]

Hello everyone. I have noticed that over the past few months, my overall balance has decreased even though I am adding money. How does this work. Because the share prices are cheaper than what I bought them for creates a debt of some sort?

I am still relatively new to all this, and want to make sure that I dont end up with all my money gone. I understand that we are in a recession of sorts, but expect to bounce back. When it does bounce back, will the share prices go up, creating a greater return? Thanks, and sorry to sound so dumb :toung:

[Show-me]

Good question! As the market declines it is decreasing the value of the individual share. That is decreasing the value of your account. Now is the time for you to kick up the contributions and make it hurt. You are and buy and holder style and you should not worry. Keep buying! The cheaper the share price gets the more shares you get when your contributions hit.

Your account will not go to zero and if it does you have bigger problems than that. Eventually the market will start coming back so keep buying the cheaper shares. The more you do the more money you will make when we recover, just remember it will take a while to recover.

If you are close to retirement, five years or less, it would be a different answer.

[tsptalk]

Good advice show-me...


number of shares
x
share price
account balance

Your bi-weekly contributions increase the number of shares

The up and down fluctuations of the funds, in your case an L-fund, influences the share price.

More on The Funds (http://www.tsptalk.com/funds.html)

Good luck!

[AFMark]

Thanks for the advice...hopefully we bounce back with a vengeance.

[Show-me]

We always do, good luck!

[James48843]

Is that what the "L" in "L-fund" stands for?

Losses?


(Just kidding. I highly recommend the L funds for long term investors- it's actually a pretty neat idea that works over long-terms.)

[SenorL321]

Hello everyone,
Just wanted to say i'm happy i ran into this forum and at least here i'll get better info in regards to my L fund investment. I have a quick question, i don't know much about investing and only about 9 months ago started contributing to the TSP L fund 2020...my question is the following, i currently have 100% of my contributions going into the L fund and am about to deploy to afghanistan for about a year...can i contribute (increase) more towards my TSP know and upon returning from deployment lower it (my contributions) back to my pre-deployment amount. I gladly appreciate any help you can give me in answering this question..thanks.

[tsptalk]

Hello everyone,
Just wanted to say i'm happy i ran into this forum and at least here i'll get better info in regards to my L fund investment. I have a quick question, i don't know much about investing and only about 9 months ago started contributing to the TSP L fund 2020...my question is the following, i currently have 100% of my contributions going into the L fund and am about to deploy to afghanistan for about a year...can i contribute (increase) more towards my TSP know and upon returning from deployment lower it (my contributions) back to my pre-deployment amount. I gladly appreciate any help you can give me in answering this question..thanks.

Welcome SenorL312!

The answer is yes. The Form is TSP-U-1 (http://www.tsp.gov/uniserv/forms/tsp-u-1.pdf)
You may need to cut and paste the link into a browser as just clicking on it may only take you to the TSP home page.

[dannyboy]

:mad: I m not too happy with the way the market has been acting. So, I have decided to be on the sideline for a few weeks or months to wait to see some stabilization? :notrust: I know that things get worse than better than worse - - -, so I'll try to exit then jump back in when I'm in a better place. :worried:

[SenorL321]

Welcome SenorL312!

The answer is yes. The Form is TSP-U-1 (http://www.tsp.gov/uniserv/forms/tsp-u-1.pdf)
You may need to cut and paste the link into a browser as just clicking on it may only take you to the TSP home page.
Thanks for the quick reply, i'll be contributing a bit more towards the fund...one last question, i know the advantage of the TSP is that what i contribute is tax deffered BUT in the case of me going to afghanistan which is a tax free zone for us military then what benifits do i actually get out of contributing, i'm sure it has it's benifits but honestly i've been working ver long hours getting ready to deploy that i've been losing alot of sleep lately and i can't think straight jejeje and i really haven't had time to search the net for the info (luckilly i found you guys e).Thanks for all the help.

[tsptalk]

Thanks for all the help.
And thank you for your service!

[Show-me]

Thanks for the quick reply, i'll be contributing a bit more towards the fund...one last question, i know the advantage of the TSP is that what i contribute is tax deffered BUT in the case of me going to afghanistan which is a tax free zone for us military then what benifits do i actually get out of contributing, i'm sure it has it's benifits but honestly i've been working ver long hours getting ready to deploy that i've been losing alot of sleep lately and i can't think straight jejeje and i really haven't had time to search the net for the info (luckilly i found you guys e).Thanks for all the help.

I wish I could have done this when I was in the first Gulf War. I was much more stupid then.

Tax free money!!! Put it in a account that you NEVER have to pay taxes on. A ROTH IRA. You have a sweet opportunity to avoid taxes big time. Roth IRA are traditionally for after tax money but if you're a vet in a combat zone, guess what? You don't pay income tax. Nice loop hole for our brothers and sisters in the field. Tell your comrades about this.

Of course it goes with out saying that if you get matching funds from TSP, get those first. O wait I just said it. Good luck and thanks for your service. Semper Fi

[SenorL321]

I wish I could have done this when I was in the first Gulf War. I was much more stupid then.

Tax free money!!! Put it in a account that you NEVER have to pay taxes on. A ROTH IRA. You have a sweet opportunity to avoid taxes big time. Roth IRA are traditionally for after tax money but if you're a vet in a combat zone, guess what? You don't pay income tax. Nice loop hole for our brothers and sisters in the field. Tell your comrades about this.

Of course it goes with out saying that if you get matching funds from TSP, get those first. O wait I just said it. Good luck and thanks for your service. Semper Fi
Thanks, i raised my contributions a couple days ago from 25% to 60%.

[Show-me]

Thanks, i raised my contributions a couple days ago from 25% to 60%.

That is good, but I want to make sure you understand what I am saying. Your TSP will be TAXED as you draw it out when you retire, it is tax 'deferred". Not really a advantage in a tax free zone.

A ROTH you will never be taxed..............ever, even on the gains..............ever.

My best advice would be to full fund this years a Roth before April 15, 2009 and then fully fund 2009's Roth.

[KevinD]

My best advice would be to full fund this years a Roth before April 15, 2009 and then fully fund 2009's Roth.

And if you're married fund hers too. :)

[EELindy]

Welcome to the board Senor...

I was deployed to Afghanistan in 2007, and like the others stated, I funded my Roth IRA first, then threw some more in my TSP. The good thing about the TSP in a combat zone is that you can go over the max ($15,500) and go up to around $45K.

Also, if you have a short term goal with regards to money, look at the SDP, where you get 10% guaranteed interest.

Like the others, I would also like to thank you for your service. I am on retirement terminal leave for the next 25 days and I am officially Fleet Reserve on 1Jan09.

Good Luck and Stay Safe!

[scpac1]

I have L2020 and want to retire in the next 2 years, TSP contribution is 5%. I am 64 yo. My loss so far is about $9,000.00.............stay in or get out??

[tsptalk]

I have L2020 and want to retire in the next 2 years, TSP contribution is 5%. I am 64 yo. My loss so far is about $9,000.00.............stay in or get out??
Welcome scpac1! Not too many of us, if any, are qualified to give individual advice like that. We can basically say which way we think the market might go, but there are so many factors to consider when giving individual advice.

That said, the L-funds are buy and hold investment vehicles that you dollar cost average into, so you should probably stay the course. That's not what most of us here do, so unless you want to change your investment strategy and philosophy and be more active in your account, you should probably stick to your plan. Maybe even kick it down a notch to 2010 or L-inc since you are so close to retiring.

Good luck! I hope you stick around and become a regular. It won't be long until you will figure out what will be best for you.

[Globalpack]

I would stay in the L-2020 fund. The $9,000.00 loss NOW should decrease over time as you automatically move towards the L-Income fund when you start withdrawing 2 years from now.

[nnuut]

Things are really shaky right now I'd wait until an uptrend is confirmed before taking a chance on the market, could continue down.
Capital Preservation mode for me.

[Birchtree]

Really, a $9K loss on a $400K account is peanuts - hold the line and continue to buy cheaper. Better days are ahead.

[Boghie]

Folks,

You are responding to a comment from SPAC1 on 2009/02/17. But great advice:p. If he/she followed it - and allocated to more risk than he/she was already at - than there are many Winnebagos (or maybe one Winnebago, a boat, and a captain/driver) in his future.

I took BTs advice and bought tons of shares when the prices were crashing. Yummy. Just watched the History Channels 'Men Who Built America' last night. BT is like JP Morgan - "Buy When There is Blood in the Streets". I see a trickle of blood now. What a joy. I get to grind on the victims of a demagogue for a few years and enjoy the view from a captains seat in the relatively near future. Than you Governor Moonbeam!!! Hope things go well for you...

This big cat is no longer content to slumber in the tall grass - this big cat will feed:).

[alevin]

In due time, Boghie, in due time.;)

[Handballer]

[QUOTE=Boghie;382048]Folks,

You are responding to a comment from SPAC1 on 2009/02/17. But great advice:p.
QUOTE]

Boghie - Sharp eye. I read all comments up to yours and didn't notice they were responding to a question from 2009.

[Hybrid93Hatch]

Hello everyone. I have noticed that over the past few months, my overall balance has decreased even though I am adding money. How does this work. Because the share prices are cheaper than what I bought them for creates a debt of some sort?

I am still relatively new to all this, and want to make sure that I dont end up with all my money gone. I understand that we are in a recession of sorts, but expect to bounce back. When it does bounce back, will the share prices go up, creating a greater return? Thanks, and sorry to sound so dumb :toung:

Almost 5 years later... I bet that account is looking quite nice these days with the record highs :-D