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Thread: A very Important Question I need answered please

  1. Question A very Important Question I need answered please

    Hope this is the right place for this. New here.

    I keep investing in a diverse spread of the tsp funds, but keep the balance in the F fund currently. Am I truly dollar cost averaging if the new money keeps buying equal amounts of the C,S & I funds but the balance remains in the F fund?

    My thinking is as the market tumbles, my bi-weekly paycheck is dollar cost averaging into cheaper equities. Am I not accomplishing what I wish?


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  3. #2

    Default Re: A very Important Question I need answered please

    That is dollar cost averaging - unless or until you make another interfund transfer. You are adding to the C, S, and I funds but when you make your next IFT all of that will get reallocated to whatever you change to.

    DCA works best for buy and holders who don't change their allocation.

    I hope that makes sense and helps.

    (I will copy this over to the DCA thread)

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  5. Default Re: A very Important Question I need answered please

    Thanks, so if I'm DCA into C fund, it works until I change into S fund. Ok that helps. Thanks
    Insurance companies haven't created a multitude of Annuities to confuse us have they? If only there was an unbiased source so I could choose one.

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  7. #4

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    Default Re: A very Important Question I need answered please

    You need to explain this a little better for those of us who are dense.

    Your pay period allocation goes to C, S, and I. You keep the balance in F. Is this a previos balance?

    Are you making interfund transfers? Are you able to log in to TSP.gov and look at your account?

    Please be a little more specific about your question.

    It could be only myself who is confused.


    "I keep investing in a diverse spread of the tsp funds, but keep the balance in the F fund currently."

    I am not sure what that means.

    DCA strictly speaking means that if you bought a share of any of the funds in 1988, you never sold it and on paper reap the profits (or losses) from then untill now. You bought more over the years and never sold them through an interfund transfer. DCA is a term a lot of people like to throw around. Those people's definitions may vary. DCA is a very cool acronym to throw at you.

    Good luck with you TSP and investments.

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  9. #5

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    Default Re: A very Important Question I need answered please

    Quote Originally Posted by Investrite View Post
    My thinking is as the market tumbles, my bi-weekly paycheck is dollar cost averaging into cheaper equities. Am I not accomplishing what I wish?
    Kind of. What you're doing is periodic investing- buying as the money becomes available on a systemic timetable (bi-weekly, etc.). Dollar Cost Averaging is more like, "I've got $4,000 I want to invest but am afraid I'm getting in at the top so I'll buy $1,000 worth every 3 months."

    Periodic investing works because you're putting money to work right now. This allows you to smooth it out over time and capture all the of the market. DCA, the verdict is still out there because you can get always get lucky. More often than not, you're best off dropping it into your desired allocation in one fell swoop. Then again, much of research has been done by an industry which would much rather have your money today than tomorrow.

    Don't confuse lower prices with valuation. Price is just an arbitrary number that depends on how many shares are floated.

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