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Why Invest in Risky TSP Stock Funds? To Make More Money

Concur, with caveats...

Application/Db Programmer
USMC
Tue Oct 14, 2008 9:43 AM

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Mr. Smith,

I just found this site via the largest of the 'day trade' communities out there (TSPTalk). Many on that site bemoan the trading limit, many don't care.

I also just started participating at this site. It is amazing how emotional and new some of these folks are. Many want some form of government insurance on their TSP retirement benefits - that will only eat into their returns, at best. Some felt that the market was frothing and moved assets into the G Fund. I did so, but not the 100% move these folks are claiming. And many, after reading about the timely transfers, bailed out last week. Now they are probably jumping in.

Uuuuugggghhhhh.

On the other hand, I do think a two trade limit is too little. I should be able to reallocate as to hold my allocation as the market fluctuates. My holdings are no longer allocated as I wish – they are too conservative because of the losses. Not by much, but who is to say.

Why keep pushing employees to lose money?

Another Government Employee
Does it matter?
Tue Oct 14, 2008 9:46 AM

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I cannot understand why FEDSMITH continues to push employees to keep investing in other than G funds at this moment.

I switched all my money to G funds in or around April after losing about 3k before finally wising up. I would have been sleepless during the past 6 months if I had not move my own funds. (I receive no government contribution, so it is truly MY money).

All funds this year have lost or are losing money and it seems the market will not rebound this year.

Re: Why keep pushing employees to lose money?

Program Specialist
ACF
Tue Oct 14, 2008 12:43 PM
Be smart, begin buying into the C,S,&I with the money that is currently being taken out of your check. You will purchase more shares and ride it upwards. It's called dollar cost averaging. You already have your other money protected in the G.

Re: Why keep pushing employees to lose money?

programmer
tso
Tue Oct 14, 2008 9:23 PM
Another Government Employee - if you'll read the article it stresses LONG TERM, not "at this moment". You're completely missing the point.

Re: Why keep pushing employees to lose money?

Tom
HF
Tue Oct 14, 2008 10:20 PM
Be smart DON"T buy now, wait until it bottoms out. I moved to the G fund last november and will jump back in later on.
Just keep an eye on the market trend. Stagflation is coming to stay for a while (1-3 years) and it wont be pretty.

Re: Why keep pushing employees to lose money?

Supervisory IT Specialist
DON
Wed Oct 15, 2008 8:23 AM
Tom, let me know when the market bottoms out. My crystal ball is broken and I'm having trouble predicting the future.

Re: Why keep pushing employees to lose money?

Product Specialist
DSCP
Thu Oct 16, 2008 10:10 AM
The Golden Rule of Investing is: Buy low; Sell High. If the Market is taking a nose dive, it makes sense to sell what's diving (Sell High) and buy the cheap and secured G Funds (Buy Low) which go up modestly but guarantee not to go down.
When you feel the Market has straightened out and is on the upswing again, the stocks are still cheap, as they are now, some even lower in price than G Funds.
But, of course, for those who don't have time to follow the market, sticking with stocks makes sense over the long haul. Either way, we're gambling with our future.
Social Security was the greatest program ever. My brother retired recently. He was a businessman and had prepared well for retirement, never counting on Social Security, which had been so badly badmouthed for so many years. To his surprise, he's getting $2,000/mo. Social Security payments. He can thank FDR!

Re: Why keep pushing employees to lose money?

Electronics Engineer
FCC
Thu Oct 23, 2008 12:42 PM
Tom HF is exactly correct. Supervisory IT Specialist DON, you will not need your crystal ball. Tom says wait until AFTER the market bottoms out. You do not need to look into the future, only the recent past. Wait until the current price is leading the recent trend upwards. That is not happening yet as of today. For a short term perspective, compare the current price to the 10, 20 and 30 exponential moving averages over the previous 2 months and don't buy until the current price is higher than these averages and the three averages are rightside up. Go to www.bigcharts.com and use SP500 (for the C Fund), and DWCPF (for the S Fund). For a long term perspective, use the 60 and 120 day EMAs over a 3 year period.

Re: Why keep pushing employees to lose money?

Manager
DOI
Fri Oct 24, 2008 9:16 AM
I agree, we have NOT seen the bottom in this market yet, we may be close, and we may not!!! I have one question- SO HOW'S THAT BUY AND HOLD THING WORKING FOR YOU????!!!!! (those who bought into that myth)

I get sick and tired of the "stay in it for the long haul crowd"! Anytime someone is within 10 years (maybe more this time) of retirement, they should be extremely cautious about investing in stocks, because a major bear market may take up to 10 years (maybe more this time- depends on how much long-term damage is done to the world economy) to recover from.

My market timing is often not the best, but I could see this bear market coming at me like a freight train! I expected a calmer version of what is happening now, to happen in 2001-2002, but the Fed prevented a REAL recession (which we needed to have) from occurring. I've been 100% in the G Fund since before we went to daily valuation, but now my share price is higher than all but two TSP funds! I'm sleeping well at night!

Thrift Savings Plan

Retired
USPS
Tue Oct 14, 2008 10:06 AM

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Sit tight and watch your money disappear in these funds. Sad but true. As we all look back, we can say, I wish I had moved the money....

I have lost more money in this plan than my other investments. But then, it's government.

Educate Yourself

Program Specialist
ACF
Tue Oct 14, 2008 10:28 AM

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Those of you that get scared about the stock market fluctuations, ask yourself a few questions:
1. How much time do you spend a week reading about investments, not just stock?
2. Do you follow the market as close when things are going good?
When you spend a little time daily or weekly trying to learn you will do so much better. You will start seeing the glass half full, not half empty. Even if you are close to retiring you still have opportunities in this market. If you say your about to retire and all your money is in stocks, then you were not diligent taking care of your financial health. I am steadily gathering up shares in the C,S, & I. I am getting close to 2 for 1 shares since the C,S,&I are off 40%. As the market is now, I would advise gathering up shares with the money going to TSP from your check. You are close to the bottom, if not there. You can put into practice dollar cost averaging going up.

Re: Educate Yourself

Retired FED
US COURTS
Thu Oct 23, 2008 9:26 AM
I may have made a mistake, but when the Gov't came to my front door and said " we are from the Gov't and are here to help you.......we think you should switch to FERS from CSRS..." I ran the other way.....my wife is still employed under FERS and we compare the difference in projected retirement, and I am glad I stayed with CSRS....

Privatise Social Security

Div Chief
Air Force
Tue Oct 14, 2008 12:02 PM

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I'm glad the Dems were able to stop privatising social security. I can imagine the social unrest we'd have if people had lost a large chunk of their annuity payments. And thank goodness I'm in CSRS. The stock market is great for any extra money you may have, but to trust it for retirement is crazy.

Re: Privatise Social Security

analyst
government
Tue Oct 14, 2008 3:16 PM
I beg to differ with your statement, I had the chance to pick CSRS offset or FERS due to FERCCA. I chose FERS! I get the advantage of makeup contributions and experience compound interest. That is in addition to a fixed FERS annuity and FERS supplement until age 62, then the supplement drops with SSA to kick in along with the FERS annuity. I will receive a good chunk of change!!!!!

Re: Privatise Social Security

analyst
DOD
Tue Oct 14, 2008 6:06 PM
Div Chief, a properly diversified privatized portfolio of someone who was already receiving payments (aka retired). It would have very little exposure to the stock market, instead would be primarily in bonds or cash instruments. Therefore they wouldn't be losing a large chunk of their payments as you've stated.

Also, keep in mind that a properly diversified privatized portfolio would have given that person a much larger pot of money to start retirement with when compared to traditional social security so volatility is much more easily handled.

Final point - the traditional social security plan the dems are endorsing will go bankrupt because of demographic trends, that's a mathmatical certainty. A privatized plan will be self supporting in the long run.

Re: Privatise Social Security

Mechanic
DOD
Thu Oct 16, 2008 2:05 AM
To the analyst,
I am also a FERCCA case who chose FERS over CSRS-offset. I would very much want to speak with you. Can I get your e-mail address?

Re: Privatise Social Security

Retired FED
US COURTS
Thu Oct 23, 2008 10:48 AM
I would also differ with Div Chief, and agree with Analyst's "final point" as mentined earlier, I may have made a mistake, but when the Gov't came to my front door and said " we are from the Gov't and are here to help you.......we think you should switch to FERS from CSRS..." I ran the other way.....my wife is still employed under FERS and we compare the difference in projected retirement, and I am glad I stayed with CSRS....

Look-up Codes for TSP Funds

Supv. Contract Specialist
Internal Revenue Service
Tue Oct 14, 2008 3:50 PM

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Ralph,

This is really a question, versus a "comment." What are the actual look-up codes for the "C", "S" and "I" funds? I'm confused because, for example, the TSP site describes the "C" fund as being invested in the "Barclays Equity Index Fund", which is suppose to track the S&P 500. Is the look-up "$INX" or something else. How about the "S" fund, is that "DWCPF"; and, the "I", is that "EFA". Or, is it not possible to accurately track the performance of these three funds directly from the reporting services, because of underlying investment practices that smooth out some of the volatility?

Lookup Codes for F/C/S/I

App/Db Programmer
USMC
Tue Oct 14, 2008 6:24 PM

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Supervisor Contract Specialist...

I use the following (from www.tsptalk.com) quotes to get the daily/weekly/etc. percentage change:

http://finance.yahoo.com/q?s=^gspc+VXF+efa+agg&d=t

The actual share price differs, but the percentage of change is the same.

I don't think you will find a complete match. I think the TSP funds are actually institutional - and, thus not sold in the marketplace.

Re: Lookup Codes for F/C/S/I

Product Specialist
DSCP
Thu Oct 16, 2008 10:44 AM
Thanks APP/DB Programmer,
I was using DWCPF for the S Fund. I don't remember why. But, TSPTalk.com is the greatest site. That and FedSmith keep government employees up to date. I share both sites with all of my co-workers.
Total Comments: 42
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