Is this too agressive for just starting out.

[Falcon53h]

hello everyone,

I am 25 years old and have recently taken interest in my tsp account.

I have been going in at 100% towards the G Fund and have saved 5922.00 over time doing so contributing 3% over five years from my income.

I now am contributing 10% and just recently switched to the L2040 %50
and the C,S,I 50% (20, 15, 15)

Being new is this change up too agressive? Is it wise not to put into G and F funds?

[RealMoneyIssues]

Welcome to the forum. :D

I am sure many folks way more intelligent than I will respond as this is a hotly debated topic. :nuts:

Anyway, welcome !!!

[BigJohn]

hello everyone,

I am 25 years old and have recently taken interest in my tsp account.

I have been going in at 100% towards the G Fund and have saved 5922.00 over time doing so contributing 3% over five years from my income.

I now am contributing 10% and just recently switched to the L2040 %50
and the C,S,I 50% (20, 15, 15)

Being new is this change up too agressive? Is it wise not to put into G and F funds?

You have the first part down correctly, trying to max out your contributions into the TSP. As far as what fund(s) to go into...I generally think those with many years until retirement (like me) need to be fully invested in stocks. You may take a beating, like most of us invested in 2008-2009 did (my TSP went down close to 40%), but if you stayed in you made your money back.

The key for me is to know what price you bought in at and to never lock in a loss (i.e. selling below what you bought in at); the flip side is to do your best to know when to lock in a gain...that is the harder of the two.

My best advice: don't do anything until you have spent some time on this board (and any other resource) and educate yourself.

Best of Luck

BigJohn

[Birchtree]

IMHO you are not being aggressive enough for your age. Forget about the L funds - you can build your own. The C fund has 500 of the largest and most secure stocks. A 100% C fund approach for contributions over the next several years is the way to go. Your goal should be to acquire as many shares of a fund as possible - and the C fund is the cheapest.

[Guest2]

Time and Compounding, risk vs. reward, you'll hear many opinions about such topics. If your looking for one's thoughts about age vs. aggression, here's mine;

1st, When you comit to the (L)Funds, you need to fully comit, then leave her alone. Sock every penny you can it, and walk away.

2nd, It never made any sense to me, when one invest's in the (L)Funds AND the other risk funds. The (L)Funds already invest your money into the C,S,F,I and G Funds. Read about the (L) Funds alittle closer to get a better understanding about the Concept of Using Time Based Funds.

3rd, Just as the (L) Funds shows you, TIME is on your side. The longer you have to invest, the more risk you can handle. In turn, the more Bear Markets you'll be able to absorb.

With the above said, here's my direct response to your question.
NO you are not too aggresive in your investments. At your age, you could greatly improve in that area. More then that, your allocation decisions might need some tweaking too.

Risk is a personal decision and must be made with the comfort of the investor. Fear comes from the unknown ! Read, Read, Read then read some more. If I looked back at my years of investing in the TSP, I think I would have been better off invested (60% I) and (40% S) for the 17 years. Hind sight is 20/20 and you have the benefit of seeking information from places like TSPTalk.com and Research. Don't be timid, Be Confident. I might not be rich or a millionaire, however, I'm sure happy I INVESTED !

FYI, JMHO, GL !

[Guest2]

Damn It ! I sounded like Birchtree ! I'm gonna have to change my name to FigTree or something ! :nuts:

WTG, Birch, Well said ! :)

[Falcon53h]

thank you all for the welcoming and advice. I will be sure do do more research and pick your brains lol

[Steel_Magnolia]

Welcome to the Board. I'll echo what others have said about the L funds. They are okay while you're learning what to do, but as soon as you can fit it into your comfort level, take a more active stance in your investing.

You are young enough that you can take a very aggressive stance in your choice of TSP funds. And remember that, because it doesn't keep up with inflation, over the long haul G Fund is the most risky fund of all!

[jpcavin]

over the long haul G Fund is the most risky fund of all!
Amen! You may as well stuff your money in your mattress!:D

[tsptalk]

hello everyone,

I am 25 years old and have recently taken interest in my tsp account.

I have been going in at 100% towards the G Fund and have saved 5922.00 over time doing so contributing 3% over five years from my income.

I now am contributing 10% and just recently switched to the L2040 %50
and the C,S,I 50% (20, 15, 15)

Being new is this change up too agressive? Is it wise not to put into G and F funds?
Welcome! I haven't read the other responses yet, but at 25 years old, I say it may actually not be aggressive enough.

The benefit you are getting from the small posrions of G and F allocations within L2040, are not enough to protect an account, so why not go 100% stocks until you are in your 30's? Or better yet, take our advice that Friends Don't Let Friends Buy and Hold. :)

Good luck!

[nasa1974]

Falcon, Welcome aboard. There is some great advice around here already. All that I can say is that I wish I was more agressive and educated back in my early days. I sat in the G fund for a long time and made very little money. Good luck.

[Pill]

Saving 15% is the new 10%. Time is on your side, however, it's better to get to retirement and have enough, then not enough.

[JTH]

You aren't being aggressive enough.

TSP is not the only retirement option you should consider, it's one of many. A multi-pronged attack on all fronts is needed. Consider opening a ROTH IRA, setting up a CD ladder, and contribute more, setting a target of 15-20% trust me you won't even know it's gone if you increase it in small increments.

What you do now will determine the quality of life you will have and it will determine when you get to retire. The good news is you're here, this means you've gone beyond that of the mindless who don't think of such things.

[KevinD]

Heres a post I made a while back about mixing the L funds with the other funds. You really don't know what you have if you mix the two...


Lets say you have a brokerage account with a bunch of money in it. You have 30% of that in the etf SPY. But you also have another 30% in IBM stock. Why? SPY has a bunch of IBM in it already, right? So you really don't know how much exposure you have to IBM because some of your money is in IBM stock and some more of it is in the IBM portion of your SPY holdings.

Same thing applies to the L funds. L2030 currently has 35.5% in the C fund. But then you're going to buy another X% of C? How do you know what your exposure is to the C fund when it's split up like that?

Part of actively managing the TSP is determining allocation/exposure at any given time. IMHO, having a portion in the L funds makes that even more complicated. How do you determine risk vs reward?

[FAB1]

Welcome!

+1 JTH

+1 Big John

Birchtree...uh +1 except for the C fund advise. :D

Something I didnt hear yet - to play and win, be nimble, it doesn't hurt to come here everyday the market is open and read the posts - watch the leaders on the Auto Tracker.

If your going to be aggressive you also need to increase your awareness so you have a better idea when to buy and sell...importantly to avoid the big market corrections.

Good luck and have fun!

[Falcon53h]

Update.

15% income going into tsp as of may 1st.


60%C, 20% S, 20% I

thank you all for the informative advice. above is where I'll sit for a good minute while I research on other options and investment plans etc.

Right now I'm Filling my head with knowledge.:confused::)

[Pill]

Congratulations, you’re on your way!

Best of luck to you!

[Dutchy]

Update.

15% income going into tsp as of may 1st.


60%C, 20% S, 20% I

thank you all for the informative advice. above is where I'll sit for a good minute while I research on other options and investment plans etc.

Right now I'm Filling my head with knowledge.:confused::)



Congratulations also and welcome! 15% allocation to TSP is great.. You may be interested in the Premium Services too... Check out Intrepid Timer's testimonials. :)

[JTH]

Update.

15% income going into tsp as of may 1st.


60%C, 20% S, 20% I

thank you all for the informative advice. above is where I'll sit for a good minute while I research on other options and investment plans etc.

Right now I'm Filling my head with knowledge.:confused::)

Outstanding! Your bank may provide some of the info and/or accounts.

[peterson82]

Good job with the 15%! I agree with most here that early on you should be the most aggressive. Once you start watching your TSP for a while you will start to understand everything better and know what you want to trade/allocations, etc. Good luck, and hopefully one day we will see you over in ETFTalk.

[dannyboy]

Update.

15% income going into tsp as of may 1st.


60%C, 20% S, 20% I

thank you all for the informative advice. above is where I'll sit for a good minute while I research on other options and investment plans etc.

Right now I'm Filling my head with knowledge.:confused::)
************************************************** *******
Put the max in you can, you can be tough in areas? After awhile, it will become the norm. :o

[law87]

Hey falcon, I recommend you sign up for intrepid timer service. It's expensive at first but its your retirement and if you have money to play stick to his etf and you will make a little side cash. Gluck man

[Boghie]

Falcon,

Good job on maxing your contributions. TSP is a tremendous asset - especially for civilians because of the match. Regardless, it is transferable - unlike a pension. It will follow you for the rest of your life.

There a lots of things I don't want following me - but money ain't one of them:p


Anyway, there is very little value in holding any G/F Fund assets at your age and with your balance. Place the assets in the C/S/I. Save the G/F for 'market timing' and more importantly a safe zone while in your 50s+. The normal long term 11% growth of the 'C Fund' (better for S, a little worse for I) will make you a very rich oldster. The 'G Fund' will have you scraping the last vestiges of Alpo from a rusty can behind the veterinarian’s office. At your age you absolutely need growth. That is what separates TSP from a bank account.

[Falcon53h]

thanks everyone for the support and advice.

[Hybrid93Hatch]

The key for me is to know what price you bought in at and to never lock in a loss

How do you know what price you bought in if you have been buying for years and each time purchased was a different price?

[Boghie]

How do you know what price you bought in if you have been buying for years and each time purchased was a different price?

Hybrid,

That is a difficult problem. I would recommend that you really don't incorporate the pricing of your contributions. BigJohn is probably talking about documenting and using the pricing of IFT transfers - at least the large(ish) ones. Trying to factor in all the salary contributions in any meaningful way would drive one nuts.

[tsptalk]

I agree with Boghie. In an IRA type account like the TSP, where taxes aren't a consideration, selling one day doesn't "lock in" a loss. Until you retire and pull you money out, the game continues to play.

It's like a professional poker player who plays every day. He (or she) will inevitably have losing days and they don't keep playing on those days because they don't want to lock in a loss. They quit, get some sleep realizing the game just picks up the next day. What happens on a given day, week, or month doesn't mean much. You just calculate the win/loss at the end of the year.

Sometimes selling, particularly when the market is going against you, is a good way to just step aside and reasses - like the poker player who needs sleep and a good meal before getting back in a game.

JMO ;)

[law87]

hello everyone,

I am 25 years old and have recently taken interest in my tsp account.

I have been going in at 100% towards the G Fund and have saved 5922.00 over time doing so contributing 3% over five years from my income.

I now am contributing 10% and just recently switched to the L2040 %50
and the C,S,I 50% (20, 15, 15)

Being new is this change up too agressive? Is it wise not to put into G and F funds?

i'm 24 and contributing 18% i say the L fund is good if you want to just set it and forget it, but these guys in here are seasonal and they can give you a better answer. for me i personally go with IT premium service and it work well for me last year, for this year it's not where i want but my ETF account has been growing pretty good.

[jkenjohnson]

I agree with Tom.

[BigJohn]

As my 2011 returns prove, my investment strategy is clearly superlative to any other...and therefore any comments otherwise are clearly either incorrect, or malicious in nature. Having said that, let me address two points:

"That is a difficult problem. I would recommend that you really don't incorporate the pricing of your contributions. BigJohn is probably talking about documenting and using the pricing of IFT transfers - at least the large(ish) ones. Trying to factor in all the salary contributions in any meaningful way would drive one nuts."

Boghie is correct, I use the price data from the date I move into a fund...and even though the value may fluctuate before I move out, I use the move in date price as a way of keeping it simple. Also, I always am either all in or all out...which makes my strategy a little easier to manage.

I agree with Boghie. In an IRA type account like the TSP, where taxes aren't a consideration, selling one day doesn't "lock in" a loss. Until you retire and pull you money out, the game continues to play.

We disagree, I consider it locking in a loss whenever I move out of a stock at a lower price than I bought in. I understand the impact of wild fluxuations between your buy in price and the date you want to sell...but again, I keep it simple while sacrificing some accuracy.

To those that haven't read my posts before (I have been gone a while), rest assured my opening line was in good fun.

Best of Luck

BigJohn