Need Basic Advice on Funds --> Am Still in C fund 100%

I have 14 years Federal service and have always been in the C fund 100%. I Currently have about $230,000 there.

For the last few years, I've been contributing at 15%. I was not attentive to my TSP over the years, having started with the C fund for no particular reason and then just leaving it sit. After 2008 I was leery of transferring things after the big losses and further delayed getting into L 2030. Obviously, the C fund was amazing in 2013 but January 2014 has been way down. So how do I know the right time to transfer the whole thing to an L fund? Is that the right thing? I will probably retire by 2035. If it's relevant, my wife is in TSP too, with everything in L2040. TSP accounts are our only substantive investments and as you may have guessed, I doubt I have the savvy to custom-manage a portfolio.

Thanks in advance!

I'd suggest staying with the C fund for eternity - 500 of the largest companies can't go wrong. The C fund is ready to show some substantial outperformance going forward. It's basically a limited risk trade - just keep your contributions going into the C fund and use dollar cost averaging to capitalize on volatility and some often repeated weakness - it's all just part of the cycles. You want to buy when prices are golden.

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Originally Posted by JKMill

I have 14 years Federal service and have always been in the C fund 100%. I Currently have about $230,000 there. For the last few years, I've been contributing at 15%. I was not attentive to my TSP over the years, having started with the C fund for no particular reason and then just leaving it sit. After 2008 I was leery of transferring things after the big losses and further delayed getting into L 2030. Obviously, the C fund was amazing in 2013 but January 2014 has been way down. So how do I know the right time to transfer the whole thing to an L fund? Is that the right thing? I will probably retire by 2035. If it's relevant, my wife is in TSP too, with everything in L2040. TSP accounts are our only substantive investments and as you may have guessed, I doubt I have the savvy to custom-manage a portfolio. Thanks in advance!

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Wow, great job saving 230k in 14 years! I'm sure many folks will agree that you've got plenty of time to ride out whatever the market does.

I'm not experienced enough really to offer much advice, but I wanted to chime in because I was in a similar situation... unsure of what to do. In retrospect, I probably should have just left everything alone, but I wanted to take a more active role in our investments - since I felt pressure to get smart on it now - before retirement is upon us in 15 or 20 years. I'm with you - who knows what to do in this market. I guess just keep pumping in as much money as you can afford - and hope that all the compounding over time - it's enough $$$ when you retire - lol.

I'm also beginning to think the L2030 fund is looking more and more appealing to someone like me who's looking for simplicity and not able to keep close tabs and not savvy enough to make the right moves. I'm just not that investment savvy & the L Funds take all the guesswork out of the equation - they do all the work for you. They manage all the rebalancing, and they reallocate the different funds each qtr so that they get more and more conservative as you get closer and closer to retirement. I mean, what's not to like?

Also, much like many of the other "target date" retirement funds out there - the L Fund target date funds seem to also be designed not to just get you TO retirement - but also get you THROUGH retirement. If, for example, you retire at 65 and live till 95? Then you'll need 30 years of income! Because each L Fund hits its target date and becomes an "L Income Fund" - it means your allocation will STAY at 80% Cash/Bonds & 20% Stocks (to hopefully account for inflation and keep that remaining 20% in stocks working for you THROUGH retirement) - so that as you age and continue to take your distributions over the years - your funds are depleted less rapidly. Not everyone is an investment guru, so I think the L Funds are worth a good look.

It turns out that by me tinkering around with our allocations - I would have been much better off had I just left everything alone and just done some basic rebalancing - so I am really kicking myself for missing out on bigger gains. I let fear make me run for the hills and I kept mistiming the markets - total rookie mistakes - but valuable lessons, nonetheless. You don't always learn and grow, unless you're willing to jump in and get your hands dirty - at least to some extent.

I'm constantly wondering what to do and second guessing my investment decisions - basically kind of floundering around... so, maybe the L2030 Fund was designed for people like me. You can essentially set it - and forget it - as long as you keep contributing as much as possible each year - and when retirement hits - hope the market is where it needs to be.

Also, I don't know if this is a financially sound option (so don't attempt w/out getting professional advice) - but if you want to go with L2030 - maybe you can do both? What I mean is - maybe your best bet would be to keep all those C shares you bought in at those golden prices - and just continue to leave them & their $230k 100% parked in C - and let compounding, dividend re-investments, and a rising market do it's thing for the next 21 years - and see what happens... Meanwhile, you could redirect all future contributions for the next 21 years into L2030 - and see what happens there - but again, I have no clue if that's a good strategy or a total load of crap. Something to keep in mind though: as of Jan 2014 - about 35% of the L2030 Fund is allocated to C anyway... So your future contributions to L2030 will still be investing pretty heavily in "C" - but you'd be getting some target date diversification with the other funds as well.

Anyway, best of luck to you!

JkMill,

With 21 years to go till retirement - meaning that you are completely within the accumulation phase - I would not worry about when to move your assets. A couple of points here or there will not mean much unless you churn your account and consistently lose those points. A good nights sleep is worth 3% eh... Plus, with one missed trade in a booming or busting market you will miss that much in a day or a week.

Anyway, in my opinion, the L Funds are pretty good - but they seem a bit risk adverse by one level. In my opinion someone retiring in 2030 should probably use the L2040 rather than the L2030. There is simply too much cash in the 2030 for someone retiring in 21 years. Then again I like risk and I think I can bail out if the yummy meal I viewed from a mile off turns into a fetid mass of maggots as I approached.

As far as mixing L funds with their component parts I am not certain. Some around here could do it, but that approach is actually pretty dangerous. You would be unbalancing a scientific (hopefully) allocation with a hunch. And, do you have the tools to see how it affects risk and return. If you want to use the L funds as guidelines just get their allocation and then split it manually using the component funds. Then you could overweight a fund(s) and underweight others. You will then see what your actual allocation is rather than the computational mess of mixing L and component funds. My brain hurts just thinking of that:p