Re: moving from fund to fund

If you have the ability to predict the future of the market, your idea is a good one. Stocks are up today about 100 points. When will you decide to move back into stocks? After they are up 100 points? Will you wait until they are up 500 points before putting your money back?

The key to your point is the statement that "If the price is still low when I go back...." A strong possibility is that you sold your L fund when it was low. When you buy it back, it is likely to be at a higher price. IN other words, there is a good chance, you will buy high and sell low.

The author's point in the article is that trying to time the market often results in a financial loss because investors use the same logic you are using in your comment. timing the market is difficult or impossible for investment professionals. for those of us who are not professional investors, it is probably a sure way to lose money.

Just my opinion...it's your retirement money so best of luck!

Re: moving from fund to fund

If you're in the L-2020 fund you're in a fund designed for those with 10 to 15 years left before retirement. That's a long time to make up a short term stock loss.

Whether the price is still low at a certain point in time depends on what it does after that certain point in time. Since it's impossible to know for certain what's going to happen in the future your logic has a flaw. As the previous poster has mentioned, if you continue with your current thinking you're more likely to buy in when the prices are high and sell when the prices are low.

My recommendation is to evaluate if you're in the proper L fund based on your retirement age and trust the rules of math and probability built in based on the funds asset allocation. That's a much more dependable way to maximize long term returns than trying to predict the future in short term time frames.

Re: moving from fund to fund

The DoD analyst has good advice for you. Smith's articles highlight the fact that most of us (can anyone?) time the market successfully over time. Trying to move your money in and out will usually result in doing exactly what was done by TSP investors back in 2002--they sold stocks and lost money just before a huge gain in the following months. The purpose of the L funds is to allow a person to put money into the fund and then let it ride until retirement without trying to guess what will happen next month or next quarter. Trying to do this will ususally result in stress and financial less.