With amusment I read all the latest articles and predictions. Most of them realy do not address the brutal truth. Crooked politician who worry about their job. MR Ralph Smith at least mentions one thruth, "our elected official see benefit to create panic..."
Re: TSP
CJC retired Thu Oct 2, 2008 1:34 PM
Along with Ralph Smith's truth, read page A19 in today's Wall Street Journal and see what these very same lawmakers were espousing about Fannie Mae and Freddie Mac! They all had huge financial stakes in them and at the expense of their constituents and the nation, they blatently promoted the deceit. McCain warned Congress about Fannie and Freddie but was steamrolled by the big mouths=history repeats itself and they're at it again.
TSP/Stock Market
Navy PAO Navy Thu Oct 2, 2008 9:41 AM
This is an excellent article that I hope everyone is reading. No one was complaining when the market was going up 10-15% a year and investments were growing. Like the man says - put it in perspective and don't panic. The stock market goes up and down - when it's down is the best time to invest -- buy low - sell high!
Re: TSP/Stock Market
Civil Engineer VHA Thu Oct 2, 2008 10:08 AM
Unless you're out and waiting to buy "lower" and sell high.
Kick back and ride it!
specialist/rep DOT Thu Oct 2, 2008 9:52 AM
This article is outstanding, right in line with the sage advise from my own sterling financial advisor. The market is full of fear and greed. Greed got us where we are and fear keeps us there. Imagine for a moment where things would be if NO ONE panicked and sold stock..........at least not in the companies that had NOT failed. Selling guarantees you lose. As long as you are not living on your TSP right now, it is merely paper losses and as history bears out - the Pheonix shall rise once again!
Re: Kick back and ride it!
EEO Diversity Manager Thu Oct 2, 2008 2:07 PM
That's the spirit! The above several articles are exactly what TSP investors need to hear.
This isn't a garage sale, folks. These are real investments.
Kick back and ride it, indeed!
Bubbles
Fed Worker DOD Thu Oct 2, 2008 9:52 AM
The internet bubble was tiny blip compared to the Mortgage bubble. We don't really know where this one ends, it is still happening. As long as forclosures are at high levels it will still be going on. Imagine if you will that
all the current bad debt is on the Government rolls, we still have more to come. Now, we have less money for infrastructure, and entitlements, etc... More cuts in services. There is less money spent, ie less profit and earnings. Lower P&E ratios rule the day, so the true market value is predicated on this, and more corrections ensue. Now, bad times do not go on forever, however anyone telling you that history is a guide to the future is a tad off. We have not seen anything like this in our lifetime, so to advocate an equity position instead of locking lossess based on the hope of possible gain may turn out to be a real fumble. The market may be 40% over-valued based on P&E now. We are out of money to spend as a country.
Re: Bubbles
Laid Back Administrator NIH Sat Oct 25, 2008 9:33 AM
Are the data that supports your contention is.....? We won't know how this will compare to the internet bubble. We do know that, as Ralph said, the market roared back over the next few years.
TSP Stock Funds Drop Again
Safety Analyst USPS Thu Oct 2, 2008 9:55 AM
It is truely amazing to read comments from some readers who only prove that many investors are investing for the wrong reason. Many of these readers apparently were sold a bill of goods in thinking that there was no potential for loss whenever engaged in stock market investment. There really is no sure thing in the market and TSP investors need to realize that. Also, a little financial education is called for. Now is the time for all TSP investors to get some education and determine truthfully how much risk are you as an investor willing to take! Let that be your guide.
Thank Goodness
Administrative Officer NIH Thu Oct 2, 2008 9:57 AM
I am glad to hear someone else that is not panicking. Maybe because I know my investment will not be touched for a nother 20 years or maybe I am naive. I am not sure but either way, I am not panicking. Our parents have lived through some really tough times. If you have been living according to your income and not buying that $500K house when you make $100K, then many would not be in the situation to panic. Think of it this way, you are buying some decent stock at a lower price and when (and we know it will) the market comes back up, you will have more stock at that lower price. That increases your wealth quickly. Everyone take a valium and relax.
Re: Thank Goodness
Budget Analyst Garrison Thu Oct 2, 2008 11:31 AM
I agree with you about not panicking. I only have 5 years until I can retire, but I’ve been actually hoping to see a decline in the market. The stock market goes up and down. I figured if it declines now, my money buys more shares and then I have time for the value of those shares to go back up. I think that if I were under FERS, I might be more worried. But, I’m under CSRS so I’ll have a fixed monthly income no matter what happens in the stock market. So I can afford to put all my money into TSP stocks.
TSP
retired USPS Thu Oct 2, 2008 9:59 AM
No one seems to ask the question, why have non-federal savings plans risen tremendously over the Federal Thrift Savings over the years?
Pretty simple. These clowns are inept! Of course they are telling you to sit tight. They are used to glacerial movement. Even a fund (like TSP) managed by grade school children could make as much money. I am so happy that I only have a few bucks in TSP and most of mine invested privately at great returns.
No doubt, everyone is taking some hit, but mine have been slight. TSP is a great indicator that socialism doesn't work.
Re: TSP
Im From Missouri DoD Thu Oct 2, 2008 11:04 AM
If you are making huge returns invested in private sector plans right now, you are either dreaming, hallucinating, or the greatest investor ever. I would think that if it were the latter, you would have better things to do than to post on Fedsmith (no offense Ralph) or if you did post, it would be something with some specifics so the rest of us could benefit.
Re: TSP
ASIP FAA Thu Oct 2, 2008 12:59 PM
I believe that you need to review articles from the likes of Jack Welsh, who says it is a fools game to invest in non-index mutual funds. He should know as he was involved in the market way before you were born, i'd expect. TSP is following a tried and true method to build long term wealth. Get a clue!
Re: TSP
USPS retired Tue Oct 7, 2008 11:25 AM
Truth is truth. Those of you "stuck" with TSP ar ethe losers due to inept investing on the part of TSP "managers".
I'm here because I worked for the gov't for 30 years and pay attention to what is on this website.
Being retired, I've got lots of time.
Oh, and as for advice on investing, do your own homework. I did.
Think for yourself
Civil Engineer VHA Thu Oct 2, 2008 10:06 AM
Gee I didn't realize I locked in my losses when I moved my money into the G Fund last December....it's kind of hard to tell since the balance "has gone up by over $14K since then". Look there are always pat answers and philosophys that people lock themselves into like a straitjacket. Do the research and think for yourself. If you we're somewhere near the bottom of this (stock price wise) then keep your money where it is. If you think we're no where near the bottom, then move it out of stocks. You pays your money, you takes your chances.
thank you
retired letter carrier USPS Thu Oct 2, 2008 10:06 AM
I always appreciate your wisdom. It comforts me. Though I am retired, and my TSP account cut almost in half since I am in " I", I am sitting tight -- to tinker with it now would be a mistake. I may try to diversify later, but not now. I am going to ride it back up -- even if I am old.
I'm not worried
working dude USCG Thu Oct 2, 2008 10:09 AM
Other than those getting ready for retirement, I don't understand how people can honestly be that upset with what is happening with their TSP accounts. The stock market is NOT a sure thing in the short term. It is in the long run though and I just look at it this way, each payday my contributions are buying shares at the sale price so in the long run it is going to be a great investment. I am in the L2030 fund so my funds will gradually shift to the safer funds as I get closer to retirement. I actually hope in the short term, the price per share drops even more so I get tons of shares. Seems so simple to me.
Praise
Attorney DoD Thu Oct 2, 2008 10:16 AM
Some much needed common sense for folks to adopt. People do not understand that they will make things much worse for themselves by pulling the money out of stocks - like lemmings. The opportunity to market time (prior to the drop) has long since passed, so riding the market back up is the only way to not lose your tail.
This is a great Opportunity!!!
Director DOT Thu Oct 2, 2008 10:51 AM
If you retirement is years away, this is a great opportunity. Buy as many shares of C, S and I funds as much as possible. You are buying shares at a steep discount. In a few years the value of your shares will rise and you will be very wealthy. The name of the game is to accumulate as many shares as possible. Buy Low!!!!
If you are close to retirement, I feel your pain. But if you had alot of shares you are better off than the fools that are dumping C, S and I shares to get LESS shares at a higher cost F & G funds.
Re: This is a great Opportunity!!!
ASIP FAA Thu Oct 2, 2008 1:03 PM
I agree wholehardedly! This is a great Buying Opportunity. If you are not maxed out, do it now!
I once had Qwest at $60
Fed Worker DOD Thu Oct 2, 2008 11:43 AM
Yes, well we are all fools in the G fund. I once bought a lot of Qwest stock when I should have been diversifying. I was fresh out of the Service and believed in my company. My CEO, had a large stake in the company, and we were busy with new orders......now it trades around 3.38. I prefer to watch the p/e ratios related to true market value. The rest of you can loose money and I will come back in and buy a bunch of shares with my G fund money when it gets down to the correct value. Did anyone notice the other day that the I fund only gave us 50% of the actual gain? Eventually the market will recover, but people in this country have already borrowed up to their eyesockets, and profits (which raise stock value) are a result of spending. Look at a one year chart of the dow, and then a 5 year. It trends downward. I am not the lemming, I am the voice in the wilderness. Now I will watch like the rest of you.
Impact of the market on TSP funds
Intermountain Region IT Security Manager National Park Service Thu Oct 2, 2008 11:46 AM
One other piece of good news is that as the market drops, the cost per share in TSP funds does as well. This allows input of new money into the TSP funds to buy more shares at a cheaper price. When the market returns to the higher levels, and it will, then one will have an even greater amount in one's TSP account for the percentage of new money invested during this period.
Re: Impact of the market on TSP funds
ICE DO Thu Oct 2, 2008 2:44 PM
Yes, yes, yes!
TSP Decline
Assistant Port Director Customs and Border Protection Thu Oct 2, 2008 12:10 PM
None of us our experts in the stock market. I placed my money is the 2010 Life Cycle fund in early March. While I suffered a small loss, it was definitely not a substantial loss suffered by my co-workers. The managers move the money each day, and as you get closer to retirement, it gets more conservative. It was the smartest move I made.
Relax and keep investing!
PHA CDC Thu Oct 2, 2008 1:16 PM
This author is correct, however, he does not go far enough. Not only should you not panic now, you should jump in! Decide what your tolerance is for the ups and downs that the TSP goes through, pick a mix of the C, S, or I funds, and plan to make systematic deposits into your TSP and leave it alone. Avoid the G and F funds. They are poor performers for long term investing. The Life Cycle funds should be avoided as well. You cheat yourself if you allow others to make your decisions.
Those that borrow against their TSP for any reason are idiots. The TSP is a long term retirement account. Do not take from it to buy a house, car or anything else. Save money to do that. Even back off the amount of contributions, but don't take loans from the TSP ever!
My point is, knee jerk reactions do not help. Whoever is president does not determine if we have food on our tables. The U.S. stock market has never lost money in any 10 year period. Relax! Keep investing! You'll be ok.
Re: Relax and keep investing!
EEO Diversity Manager Thu Oct 2, 2008 3:01 PM
Why should we waste more than 5 seconds trying to convince anyone where to invest their hard-earned money? They're all adults.
The folks who continue to rail against anything but the G Fund get what they deserve. This reminds me of my idiot brother-in-law, Bill. (He's actually a great indicator of What Not To Do in life).
Bill moved all of his investments into the G fund last week. Before that he bought a Hyundai and laughed at my Toyota. We traded them in at the same time, with predictable results: Mine $12, 500; his $4000. Ouch.
Same thing with his house. He bought 75 miles away from town (and his office). I paid a bit more and live minutes from work. He laughed at that, too. Now he can't afford the gas to get him into work and no one wants to carpool with him (he gives unsolicied TSP advice for 75 miles--each way).
My sister will have half of what we have, TSP-wise, when we all retire. You just can't help some knuckleheads.
I bought them Investing for Dummies.
Check the Math
Management Analyst VA Thu Oct 2, 2008 1:52 PM
I am 100% G Fund right now, and here's my math. I'd love to hear from anyone who has a more convincing concept. A simplistic example, space is limited:
1. Joe & Sam each have $10K in an L Fund @ $10 a share.
2. Joe stands pat, and in the succeeding year sees his share value decrease by 20%, still has 1000 shares @ $8 per share.
3. Sam moves to 100% G Fund, maintaining $10K. In that same year he sees a 4% gain = now $10,400.
4. The market reverses, the L Fund is now back up to $9 a share. Joe has 1000 shares @ $9 = $9000. Sam reenters the market back into L, so $10,400/$9 = 1156 shares.
5. Snapshot: Sam = 1156 L Fund shares in play @ $10,400. Joe = 1000 L Fund shares in play @ $9000.
Note that Sam does not have to buy at the absolute optimal "bottoming out" point to show an appreciable gain compared to Joe. He just has to be convinced some semblance of acceptable normality has returned.
So with no bottom in sight I'm Sam collecting my 4% & waiting!
Re: Check the Math
ICE DO Thu Oct 2, 2008 2:51 PM
Wow, you really do need to check your math!
Uh, you assumed that everyone but you stared at $0?
The folks in the C, S and I funds haven't permanently lost any money or shares. When you the market heads back north, the folks in the C Fund (for example) will see significant increases (much more than $400).
So those C and S Fund investors won't have $9K, they'll have more like $16,500 (vs your $10,400).
Re: Check the Math
Management Analyst VA Thu Oct 2, 2008 4:44 PM
To ICE:
1. Start point is immaterial. I'm trying to do the best I can with the resources I have available.
2. Please understand, I am in G while the market is deteriorating & plan to come back out as soon as the market stabilizes again.
3. RE C/S/I Investors: The L Fund was given merely as an example. If you like, compare your own C/S/I situation under the same scenario, apples to apples.
The point is, do we stand pat or go to safety in G and then reenter when we accept the market's improved situation.
Another view: If I had been in the market a few days ago my account would have seen a $20K loss in a single day. To illustrate impact, recovering that $20K would require 18 months via payday contributions & matching.
But I didn't take that loss.
So while some lose $$ but keep their share count, I have my $$ intact & am gaining +/-4% in G, ready to return to CSI (or L) as I see fit, when it appears market risk factors are acceptable again.
Re: Check the Math
Peon USDA Thu Oct 2, 2008 4:46 PM
This is not anywhere close to being accurate.
Re: Check the Math
IT SPEC DOE Thu Oct 2, 2008 5:04 PM
Here's where I think the problem is. There are days of really big gains in the market, if you miss out on even a few of them your returns will be much less. You can't predict when the market will change.
The "pros" can't time the market consistently and they know a lot more than the ave. joe. If it were easy to predict, we'd all be rich.
I am currently buying stock with all new investment money, no more new money is going to the G fund.
And, I also moved a few percentage of G into I, C and S today. I'm going to slowly move from 40% G to 30% G.
I also bought more stock in my Roth IRA yesterday.
I don't know when the market will be going up again, but I do know it's going down so I am buying up more.
I won't be touching the TSP funds for 10 years, so hopefully taking more risk will pay off. If not, I will still have my FERS pension and Social Security which will provide for a bare bones income.
Re: Check the Math
IT ssc Thu Oct 2, 2008 6:23 PM
I have put all my money in G Fund since November 2008 and will wait until Dow 8000 or until average people can actually afford to purchase houses to jump back in C and S Funds. I like your math.
Re: Check the Math
govt drone NOAA Fri Oct 3, 2008 6:11 AM
Well...that might work for a single year. The problem is that TSP investments are intended to be a retirement fund...that is...over the long term. Historically your G-fund investment will be worth far less than one diversified in stocks and bonds over the long haul.
Re: Check the Math
Electronics Engineer FCC Mon Oct 6, 2008 8:53 AM
Management analyst, you are 100% correct but, you might as well stop trying to convince these folks who commented on your post. They are firm believers in the "conventional wisdom" buy-and-hold bury-head-in-sand approach. They are happy making losses now, and content to spend most of their future gains "making up" those losses instead of adding even further to their totals. The problem that Ralph Smith is addressing is that many people did not go to the G Fund last year this time when the market trends turned. Now they have taken big losses. Period. It is too late to avoid those losses. Sorry folks. BTW, for all those folks who think they know when TSP shares are "cheap" or "on sale", it is still too soon buy back in, the trends are still downward. I will make a post on this website when the trends turn upward again.
Re: Check the Math
EEO Diversity Manager Tue Oct 7, 2008 11:41 AM
Hey, don't take our word on it, look at the facts per teh TSP website
If Employee "A" and Employee "B" had both started investing in the TSP at the same time (let's say 1988), where would they be now?
Employee "A" remained in the G Fund for 20 years; Employee "B" has remained consistently in the C Fund.
Where are they now?
Far from "burying her head in the sand," Employee "B" has rode the markets ups and downs to a hefty return, WAY ahead of Employee "A".
Case in point...
Re: Check the Math
Electronics Engineer FCC Wed Oct 8, 2008 8:06 AM
Re: EEO
Several years ago, when the concept of "shares" was introduced into the TSP the shares in each fund were set at $10 per share in each fund.
As of October 7, 2008:
G Fund shares = $ 12.6407
C Fund shares = $ 11.4287
Now, I do not advocate staying in G Fund all the time, but only when the other funds are dropping like the proverbial rock. Historically, the C, S, I Funds trend upwards most of the time. But not this year. I say, don't buy an asset while it is falling in price. Instead, buy it when it is rising in price. Why is that so hard to understand?
Well said
EEO Diversity Manager Thu Oct 2, 2008 1:58 PM
The author is right on point.
I know it's tough, folks, but you are NOT losing anything, as long as you keep the stocks (C, I, S, F, L--whatever). Sell them now (by moving $$ into the G Fund, for example) and you really have locked in your losses.
Please stop looking at the $ and look at the # of stocks you own. That is the true indicator of how you're doing.
We'll pull through this just fine.
Re: Well said
Tomato Grower Oaklandon Road Sat Oct 4, 2008 9:38 AM
2 ways to look at it. you either lock in your losses or stop the bleeding. only time will tell which was right call but for sure only one call can be the right one. If Dow touches 10000 and then recovers to 14000 within a few years, the bloak who stayed the course made the right decision. If the market continues to fall to Dow 8000, the bloak who decided to stop the bleeding at Dow 10400 made the right decision IF he jumps back in at 8000 Dow. If Dow does not return to nearly as high level as before for many years (it has happened before, both in the 70s and from 1998 until today), the bloak who hangs on for dear life suffers long term losses.
Too many people think that there is "blood in the streets" and time to buy. That adage is no longer a minority view but is becoming a majority view. Sometimes old adages lose their usefullness.
tsp investment
police sgt veteran affairs Thu Oct 2, 2008 2:16 PM
Those who didn't see this coming a year ago and started transfering to the G fund are no better than the greedy bankers and brokers who got us into this mess. At least my G fund is gaining something in the midst of all this. And NO, I couldn't ride this out I plan on retiring in a year and a big hit like this mess would have killed me.
We are all idiots in G?
Gov Worker DoD Thu Oct 2, 2008 4:06 PM
I moved to the safe spot in October 07, and now I still have that amount +4% to buy stocks. Now I can buy low. P.S. I own a Toyota as well, the last one saved my life.
article
biologist Forest Service Thu Oct 2, 2008 7:36 PM
This article is not helpful in the least. Just keep the faith and hope things get better?? That is your advice? Do you know how long it takes to recoup losses of 30% in the market??? Ralph, I think you need to get a grip.
Re: article
police sgt veteran affairs Fri Oct 3, 2008 5:52 AM
Right On! Half say stay put and buy, buy, buy and half say take the 3 or 4% in G. No one takes into account the fact of "when" you are going to retire. I'm going in a year and a loss right now of 20 to 30% would sink me for retirement. Of course in the long haul the market will recoup but I don't have a long haul left. For some reason most think you can recoup a 20% loss overnight, sorry folks, it doesn't happen. It takes years!
Re: article
Management Analyst VA Fri Oct 3, 2008 9:41 AM
Good comments RE cost of large losses! May I offer a suggestion: Consider a "risk continuum". Not much space, so more simplicity:
1. Divide a 3" line into three 1" segments, three zones.
2. Start at the left, Zone 1, High Risk, the market is in retreat. Go to G & stay there. Take the 4% & minimize loss.
3. Right side zone, Zone 3: The market is consistently producing positive results. Put your $$ out in CSI & reap the benefits of an aggressive position.
4. Center zone, Zone 2: The tricky zone. Our TSP club often uses "splits" to distribute risk as the L Funds do, we just do our own L Fund (EX: 60-40 FI "split").
Season your decisions with (1) time to retirement, (2) risk factor level you are comfortable with, (3) $$ you need in retirement based on your particular retirement plans, (4) etc (other factors).
Then move up & down the 3-part risk continuum based on market conditions & your particular situation.
Our club is primarily safe in G now, waiting.
Another way
mv DoN Thu Oct 2, 2008 8:15 PM
Here is another little trick that I learned. Instead of moving the money around in the funds, take out a loan against the TSP. I have done this twice and both times the market went down soon after I took the loan. Now I get to put the money back in at a lower share price, plus interest which goes into my account so I am paying myself, and the money I borrowed is in a CD at the bank earning interest in an non-retirement account so I can have access to it whenever I want.
Reinvest at lower share price + loan interest + CD interest = more money for me :-)
*** Warning ***
To do this you have to have the money avaiable to pay back the loan. I was already going to be saving the money anyway so I just get the $$ up front and put it into a CD at the back instead of saving every month until I have enough to purchase the CD.
This is a timing thing. If you take a loan from the TSP and the market goes up you will not be better off than if you had left the money alone.
my pre-tech bubble 401K - hasn't grown since 2000
Engineer USACE Thu Oct 2, 2008 9:03 PM
The only safe place to put money is in your mattress. I had $50K in a non-federal 401K prior to the tech bubble burst, evenly split into an S&P 500 index fund, international fund and small cap fund. The value went down to $35K with the tech bubble burst.
I did not touch the money. It just got back to over $50K this last year. That is zero growth over 8 years and I haven't got my quarterly statement yet but I am betting it is back down to $35K.
My first five years out of college were before the tech bubble exploded. I thought then that I would be a millionaire before 50. I heard a 25 year old guy tell me the same thing a couple years ago.
I don't believe any of the financial advice I have heard during my professional career - I would have been better off in a bank or savings bonds - oh yeah savings bonds go to $700 billion dollar golden parachute payouts and banks use your money to finance bad mortgages and the country is paying its bills with a credit card.
Re: my pre-tech bubble 401K - hasn't grown since 2000
Unhigh on the Food Chain VA Fri Oct 3, 2008 11:02 AM
I began actually monitoring my TSP in 9/07 and wanted to see the differences after making what I called strategic moves. Looking at the accounts now, I have made in excess of $15,000. I am not a rich person, thanks to the Bush Administration, however, I faired pretty well and am thankful. I still have many, many years before retirement and expect the money to continue to grow.
Fund Allocation
Mitchell Military Thu Oct 2, 2008 10:52 PM
I saw the storm clouds on the horizon a few days into the new year and moved all my money into the F and G funds thereby dodging the big drop that has played out over the last nine months. Whenever things 'bottom out' and stabilize, I'l buy back into the C, S and I funds and hopefully, make out better in the long run by riding it back up.
I'm not a smart guy, but I pay attention, and it's not hard.
PS; "It's not how much you make in the good years, but how much you avoid loosing in the bad ones."
Thank You
Tighten Your Belt
Retired Airforce U.S Navy Fri Oct 3, 2008 6:14 AM
I read through everybody's comments and I understand the many different schools of thought. Thinking is your most enabling tool. Sometimes it is best to learn from the comments then to respond to a comment without knowing all the facts about the individual making the comment. Age, and years left to retirement can be and most likely are the reasons for the many different schools of thought. The only advice that I have is if you can afford it increase your contributions if you are not already putting in the maximum contribution of $15,500 a year. Just remember that you have to take into account what the government matches. If you reach the $15,500 before the end of the year the government will stop contributing/matching to your TSP allotment. Also if you are under the Fers retirement system make sure you are contributing at least 5% so you will get the governments maximum matching of 5%. My understanding is that CSRS employees do not receive government matching. The $15,500 is upto you
Diversity
Supreme Mongo Bureau of Mongo Fri Oct 3, 2008 7:15 AM
I split my TSP 75% to 'G' and 25% to 'C', and haven't touched it. I suffered some initial losses, but being able to pick up 3 shares of the 'C' for the price of 2 has been nice. When this passes (and it shall) all the extra shares will come in handy to pad my retirement a little better. I have enough time to ride this one out, but you can bet the next time I see trouble brewing on the horizon everything gets put in the 'G' fund.
Crybabies
Retired Supervisor Defense Informations Systems Agency Fri Oct 3, 2008 10:06 AM
The three questions Mr Smith fielded right off: (isn't there gov't insurance for losses; not fair - gov't should be making up for losses; this TSP business is just too much stress-our retirement being tied to stock market just isn't right) all come from Obama voters no doubt. Poor poor pitiful me. Can't the government do something about my hemroids?
Jeeze, no wonder Fedsmith reports for the first time "Obama takes the lead among readers". They've all been on the dole so long they forgot the most basic principal in life.... "that it is hard and it is supposed to be"; and that they are privileged beyond 85% of their contemporaries who can only imagine such benefits.
We're so lazy we don't even want to apply ourselves towards outwitting happenstance; we want the government to do it for us.
Freeking bunch of priveledged nansie pansies!!!!
Diversify & observations
Gopher FAA Sat Oct 4, 2008 7:47 AM
I didn't see it in this supposed advice article but the key to any long term investing plan is to diversify your portfolio. In the TSP we have the option to put our money in cash, stocks & bonds. The percentages we have in each should be determined by our own risk tolerance and market conditions. As for the comments to this article made by so many to buy low and sell high-- that's absolutely brilliant advice-- if you could only just pinpoint where low really is.
Was the S&P 500 low at 1400? 1300? 1200? or 1100? Keep in mind even the strongest buy and hold people normally get flushed out of a severe down market before it's over. The most steadfast normally get get taken out at or near the bottom. You can look it up if you want.
Joe
Fed Worker DOD Tue Oct 7, 2008 6:55 AM
I think it was Joe Kennedy that once said "Only a sucker waits for top dollar." This economy's fundamentals are not really all that sound, and we are in a place where there is very little money left to be spent by the Amercian consumer, and many have borrowed up to their eyeballs. While stock P/E ratios are generally a result of earnings, what if the well is dry? where do these earnings come from? We are pretty well tapped out,and the rich are becoming the super-rich, while the poor are getting poorer. If you look at American History, it looks a lot like 1928. Abundant goods and services are flowing in very quickly, but with wage stagnation and high debt there is going to be more goods than dollars, hence deflation. It appears we have the makings for a really good depression or deep recession (which was made up because depression is too harsh a word). We just bailed out the billionaires, where is the investment in energy independence? Infrastructure? I guess we like repeating history.
Re: Joe
EEO Diversity Manager Tue Oct 7, 2008 11:33 AM
Joe Kennedy was a bootlegger. I take my investment advice from folks with a proven track record.
Don't Panic... Who me??
Wyorattler Navy Tue Oct 7, 2008 6:40 PM
I am someone who is not close to retirement age and I went into TSP with my eyes wide open. So I am concerned but not ready to turn to jello just yet... The burning question for me and I hope someone can answer this in light of the problems in the markets is...
As I understand it with the money I put into TSP I am buying shares of a fund. That fund based on what the market does goes up and down. So... If the market was up I would be buying less shares of the fund based on cost. Conversely if the market goes down I should be buying more shares (if I don't change the amount I have originally been putting in the fund) so eventually when the market does go back up I should possibly be able to recoup what is currently being lost? Anyone???
Re: Don't Panic... Who me??
Electronics Engineer FCC Thu Oct 9, 2008 7:59 AM
Yes you are basically correct in your understanding. But don't get really hung up on the number of shares. That is just a mathematical construct that did not even exist for the first years of the TSP. They went to "shares" because it just looked too ugly when losses were subtracted in the then monthly statements. The only thing that really matters is your balance, i.e. the dollars and cents in your account. Shares matter only when you are talking about a stock or closed-end fund, where there is a finite amount of shares authorized to be issued, and any increase in the finite number of extant shares represents a dilution in ownership. That is not the case with the TSP Funds, which are open ended.
Re: Don't Panic... Who me??
Wyorattler Navy Thu Oct 9, 2008 2:22 PM
Thanks.
That is more info than I had again thank you. Besides taking a college level course on economics is there a good source to find or learn that kind of info? In simple terms? I understand that TSP is a risk based plan but I think it might be helpful to understand the mechanics of it. i.e... Money goes into the machine and it comes out looking like this based on the conditions... Or maybe it would be too much info like knowing how they handle and cook the food in the galley... >: )
I understood what you said Chief just wish I knew why >: )
RE:Joe
Fed Worker DOD Wed Oct 8, 2008 6:10 AM
DM, when your family fortune hits into the Billions I would gladly lend you an ear as well.
10/08/08
Information Systems Security Officer Charleston SC State Wed Oct 8, 2008 3:44 PM
A day that "looked" low risk of additional market slide. I was wrong, and that was enough for me for a while.. :) I shall sit in the G, with my hands in my pockets, and WATCH THE BLINKING LIGHTS from here on out. What happens after they run out of numbers, like when it hits 0? This sell off has got to stop or they might just run out of things to sell off??
Thanks, Marty in Charleston..
CAN'T HELP IT
retired LETTER CARRIER USPS Thu Oct 9, 2008 1:47 PM
I can't help it. I am getting really depressed. I know my stock my dig out of this -- but I am afraid by the time it digs out of this mess either (a) I will be dead, or (b) another downturn/recession will hit. It is a vicious circle and the anxiety and stress involved is hampering my "retirement." It is hard not to sit around and worry. Should I buy the good milk I like to drink, or the icky stuff I may have to be drinking for a long time anyway. I mean it -- I am really depressed -- have lost over $50,000 since October, 2007. Guess I'll try to lay down again and forget it.....again
Diversification
Executive Assistant SSA Fri Oct 10, 2008 12:26 PM
In real estate the key words are location/location/location; when investing the key words are diversify/diversify/diversify. If the Internet Bubble didn't teach us, hopefully this Wallstreet Bailout period will!
ALL THE INDICATORS WERE THERE
RETIRED FROM THE FED. VA/USAF Fri Oct 10, 2008 8:51 PM
The US Government knew the market was "going down the tube." Lowering the Fed. lending rate, the tax rebate program, the increase in the price of crude oil, and etc., were indicators, and a bandaids attempt to delay the inevitable.
It's like living on the Gulf Coast, where I was born, and not watching the weather reports, and wondering why the roof has been blown away, the windows are all busted out, and there is 3 feet of water in my house.
You can not say there were no indicators, and you were not warned. The government did not want everyone to know.
I was able to "see the forest for the tree," and was prepared. There was a time in my life that I beleived and trusted the US Government, but wisdom, which was obtained through age, has taught me different.
Thank you Brother Plasitus for teaching me history.
TSP Losses not Insured by Government
retired DoD Sat Oct 11, 2008 5:14 AM
I understand the TSP is not insured by our government. However, wouldn't it be nice if TSP account holders could get the same consideration and bailout from our members in Congress that the fat cats did on Wall Street, who played a major role in causing the melt-down in our economy? But then, we don't have the lobbying power of Wall Street.
It is easy to say hold on, don't sell off your stocks in the C, I, and S funds. I was well diversified in the TSP with money in all five funds; and I hung on much longer in that diversification than what seemed sensible. But when you've seen one third of your TSP account disappear in a few weeks, and you're less than three months from having to draw an annuity while the melt-down still continues, that advice is not so comforting. If one could avoid having to draw an annuity, or completely withdrawing all of a TSP account past age 70-1/2, that advice might be valid. Am I missing something that I should know?
retired, DOD
App/Db Programmer USMC Sat Oct 11, 2008 11:10 AM
retired, DOD.
The L Funds are balanced portfolios keying on retirement date. Obviously, there are more factors than the potential date of retirement that should be used in determining your asset allocation - but...
YTD losses in L Funds
L-Income: -7%
L-2010: -13%
L-2020: -25%
L-2030: -29%
L-2040: -33%
Those are Year-To-Date, not a few weeks.
Since September 19:
L-Income: -6.6%
L-2010: -10%
L-2020: -20%
L-2030: -24%
L-2040: -27%
So, you are requiring income from your account in three months, yet you were obviously invested as if you were retiring in thirty two (32) years. Properly diversified?
I feel for you, as I felt for Enron employees. But, unlike the Enron employees you also have a pension included in your retirement plan. That softens things up a bit...
But, why should I bail out either Wall Street fat cats or you or millions of you? Sorry...
Why stay the course?
You heard this over and over DOT/FAA Sat Oct 11, 2008 3:08 PM
How many times has someone on TV or some web site telling you to "sit tight, don't move your money out of the stock market"? Good advice coming from self serving individuals whom themselves stayed the course and want you to go down with the ship with them. Ask yourselves, if everyone is staying put, then who is selling?
I predict the DOW will go below 7000, pehaps to 5000 before this mess is over. This isn't another internet bubble or S&L problem, it's a world wide credit swap derivative financial problem in the 50 trillion dollar range. 8500 DOW will look like a distant high when you wake up one morning, turn on CNBC, and see the futures down 1000+ points because Germany or another large country crashed over night.
Protect yourself and thank your Gov't for removing CSRS and letting you become your own financial wizard, allowing only one TSP move a month, before 12 noon. Seems like a lot happens after 12 noon that effects the market (ex. bailout vote, rate cuts). How convient.
Asset Allocation???
App/Db Programmer USMC Sat Oct 11, 2008 10:04 PM
How many folks reading and commenting on this topic think 'Staying the Course' means a 100% investment in the I Fund, or the S Fund, or the C Fund, or the F Fund, or the G Fund?
You will be gobblin Alpo in retirement if you 'invest' solely in the G or F Funds over your working life.
Everybody with more than a seven year time horizon should still have a big chuck still in the C/S/I funds. Maybe 50% or so. Otherwise you will miss a huge piece of the run up. Will you reallocate if the market booms by 10% on Tuesday, 15% over the coming week, 20% over the remainder of the month. Or will the volatility freak you out. A 50% stock allocation right now means that another week like the last will cost you 8% or 9%. But, conversely a standard Bullish correction will gain you 11% or 12%. Then, if it holds you can allocate a piece at a time. Regretfully, you can now only make two IFTs a month.
Folks, You G Funders have missed it...
App/Db Programmer USMC Mon Oct 13, 2008 3:04 PM
Folks,
Those of you who moved 100% into the G because of last week have missed much of the recovery. If you attempt to move your assets to the C/S/I tomorrow (couldn't today) you will just be following trends.
I am about 50% in C/S/I, 30% G, and 20% F. I missed 45% - 50% of the gains I would have made had I held my aggressive portfolio (which my age permits). However, the allocation of 25% G and 20% F as of August 15 dramatically softened the blow of the last few weeks.
I, like the rest of us, am not a wizard. And, I don't like to try to guess when the market rebounds - it still may not have done so. But the market was too squirly to allow for a good sleep at night.
So, I can accept a very good rebound now rather than try to time the market to perfection.
Now, for those who are going to miss this weeks rebound - DO NOT jump in. Take a measured approach at this juncture. There WILL be downturns.
About 2008
Information Systems Security Officer Charleston SC State Tue Oct 14, 2008 3:08 PM
When the sky begins to darken and you can make a pretty good guess that it's about to rain for awhile then preparing for the near future makes since to me. And once the unstable conditions of a huge storm has passed then preparing for the near future also makes since to me as well. Watch, listen, read, process and decide. I have managed to stay out of (not loose) any of my max TSP contributions for the year so far. Sure could use 5 chances to move things per month. Although it sounds like 2, it's really just 1.
TSP
Accounting Technician USDA Wed Oct 15, 2008 1:55 PM
I don't see how you can say "leave as much as possible in the stock market and avoid locking in your losses"when the market has loss at least 12 months going back? I moved my money into the G fund a year ago to "lock in my earnings". When I see the market go up two months or so I will move it back and I won't have to play catch-up for months.
Buy and Hold Forever
physical scientist DOI Thu Oct 16, 2008 2:00 PM
The 20 year time frame for investing in the TSP might be meaningful for an employee with 10 years or less of service so far. The C fund mirrors the S&P500 Index fund more or less. Over the Last 10 years the S&P Index has been essentially flat, which means that any sum invested 10 years ago is probably about the same today. Thus, for employees with less than 5 years to go for retirement, and who may actually need the capital saved in their TSP could be on the losing end during a period of time in which the markets do not do so well.
After the 2000 market drop, it was not reasonably safe to re invest until March 2003...and it took some folks even longer to recover their losses after the 2000 drop.
Unless one has 80 years of time to take advantage of long term market averages, permanent buy and hold investing really is a myth!
TSP
BLM
Thu Oct 2, 2008 9:38 AM
With amusment I read all the latest articles and predictions. Most of them realy do not address the brutal truth. Crooked politician who worry about their job. MR Ralph Smith at least mentions one thruth, "our elected official see benefit to create panic..."
Re: TSP
retired
Thu Oct 2, 2008 1:34 PM
TSP/Stock Market
Navy
Thu Oct 2, 2008 9:41 AM
This is an excellent article that I hope everyone is reading. No one was complaining when the market was going up 10-15% a year and investments were growing. Like the man says - put it in perspective and don't panic. The stock market goes up and down - when it's down is the best time to invest -- buy low - sell high!
Re: TSP/Stock Market
VHA
Thu Oct 2, 2008 10:08 AM
Kick back and ride it!
DOT
Thu Oct 2, 2008 9:52 AM
This article is outstanding, right in line with the sage advise from my own sterling financial advisor. The market is full of fear and greed. Greed got us where we are and fear keeps us there. Imagine for a moment where things would be if NO ONE panicked and sold stock..........at least not in the companies that had NOT failed. Selling guarantees you lose. As long as you are not living on your TSP right now, it is merely paper losses and as history bears out - the Pheonix shall rise once again!
Re: Kick back and ride it!
Diversity Manager
Thu Oct 2, 2008 2:07 PM
This isn't a garage sale, folks. These are real investments.
Kick back and ride it, indeed!
Bubbles
DOD
Thu Oct 2, 2008 9:52 AM
The internet bubble was tiny blip compared to the Mortgage bubble. We don't really know where this one ends, it is still happening. As long as forclosures are at high levels it will still be going on. Imagine if you will that
all the current bad debt is on the Government rolls, we still have more to come. Now, we have less money for infrastructure, and entitlements, etc... More cuts in services. There is less money spent, ie less profit and earnings. Lower P&E ratios rule the day, so the true market value is predicated on this, and more corrections ensue. Now, bad times do not go on forever, however anyone telling you that history is a guide to the future is a tad off. We have not seen anything like this in our lifetime, so to advocate an equity position instead of locking lossess based on the hope of possible gain may turn out to be a real fumble. The market may be 40% over-valued based on P&E now. We are out of money to spend as a country.
Re: Bubbles
NIH
Sat Oct 25, 2008 9:33 AM
TSP Stock Funds Drop Again
USPS
Thu Oct 2, 2008 9:55 AM
It is truely amazing to read comments from some readers who only prove that many investors are investing for the wrong reason. Many of these readers apparently were sold a bill of goods in thinking that there was no potential for loss whenever engaged in stock market investment. There really is no sure thing in the market and TSP investors need to realize that. Also, a little financial education is called for. Now is the time for all TSP investors to get some education and determine truthfully how much risk are you as an investor willing to take! Let that be your guide.
Thank Goodness
NIH
Thu Oct 2, 2008 9:57 AM
I am glad to hear someone else that is not panicking. Maybe because I know my investment will not be touched for a nother 20 years or maybe I am naive. I am not sure but either way, I am not panicking. Our parents have lived through some really tough times. If you have been living according to your income and not buying that $500K house when you make $100K, then many would not be in the situation to panic. Think of it this way, you are buying some decent stock at a lower price and when (and we know it will) the market comes back up, you will have more stock at that lower price. That increases your wealth quickly. Everyone take a valium and relax.
Re: Thank Goodness
Garrison
Thu Oct 2, 2008 11:31 AM
TSP
USPS
Thu Oct 2, 2008 9:59 AM
No one seems to ask the question, why have non-federal savings plans risen tremendously over the Federal Thrift Savings over the years?
Pretty simple. These clowns are inept! Of course they are telling you to sit tight. They are used to glacerial movement. Even a fund (like TSP) managed by grade school children could make as much money. I am so happy that I only have a few bucks in TSP and most of mine invested privately at great returns.
No doubt, everyone is taking some hit, but mine have been slight. TSP is a great indicator that socialism doesn't work.
Re: TSP
DoD
Thu Oct 2, 2008 11:04 AM
Re: TSP
FAA
Thu Oct 2, 2008 12:59 PM
Re: TSP
retired
Tue Oct 7, 2008 11:25 AM
I'm here because I worked for the gov't for 30 years and pay attention to what is on this website.
Being retired, I've got lots of time.
Oh, and as for advice on investing, do your own homework. I did.
Think for yourself
VHA
Thu Oct 2, 2008 10:06 AM
Gee I didn't realize I locked in my losses when I moved my money into the G Fund last December....it's kind of hard to tell since the balance "has gone up by over $14K since then". Look there are always pat answers and philosophys that people lock themselves into like a straitjacket. Do the research and think for yourself. If you we're somewhere near the bottom of this (stock price wise) then keep your money where it is. If you think we're no where near the bottom, then move it out of stocks. You pays your money, you takes your chances.
thank you
USPS
Thu Oct 2, 2008 10:06 AM
I always appreciate your wisdom. It comforts me. Though I am retired, and my TSP account cut almost in half since I am in " I", I am sitting tight -- to tinker with it now would be a mistake. I may try to diversify later, but not now. I am going to ride it back up -- even if I am old.
I'm not worried
USCG
Thu Oct 2, 2008 10:09 AM
Other than those getting ready for retirement, I don't understand how people can honestly be that upset with what is happening with their TSP accounts. The stock market is NOT a sure thing in the short term. It is in the long run though and I just look at it this way, each payday my contributions are buying shares at the sale price so in the long run it is going to be a great investment. I am in the L2030 fund so my funds will gradually shift to the safer funds as I get closer to retirement. I actually hope in the short term, the price per share drops even more so I get tons of shares. Seems so simple to me.
Praise
DoD
Thu Oct 2, 2008 10:16 AM
Some much needed common sense for folks to adopt. People do not understand that they will make things much worse for themselves by pulling the money out of stocks - like lemmings. The opportunity to market time (prior to the drop) has long since passed, so riding the market back up is the only way to not lose your tail.
This is a great Opportunity!!!
DOT
Thu Oct 2, 2008 10:51 AM
If you retirement is years away, this is a great opportunity. Buy as many shares of C, S and I funds as much as possible. You are buying shares at a steep discount. In a few years the value of your shares will rise and you will be very wealthy. The name of the game is to accumulate as many shares as possible. Buy Low!!!!
If you are close to retirement, I feel your pain. But if you had alot of shares you are better off than the fools that are dumping C, S and I shares to get LESS shares at a higher cost F & G funds.
Re: This is a great Opportunity!!!
FAA
Thu Oct 2, 2008 1:03 PM
I once had Qwest at $60
DOD
Thu Oct 2, 2008 11:43 AM
Yes, well we are all fools in the G fund. I once bought a lot of Qwest stock when I should have been diversifying. I was fresh out of the Service and believed in my company. My CEO, had a large stake in the company, and we were busy with new orders......now it trades around 3.38. I prefer to watch the p/e ratios related to true market value. The rest of you can loose money and I will come back in and buy a bunch of shares with my G fund money when it gets down to the correct value. Did anyone notice the other day that the I fund only gave us 50% of the actual gain? Eventually the market will recover, but people in this country have already borrowed up to their eyesockets, and profits (which raise stock value) are a result of spending. Look at a one year chart of the dow, and then a 5 year. It trends downward. I am not the lemming, I am the voice in the wilderness. Now I will watch like the rest of you.
Impact of the market on TSP funds
National Park Service
Thu Oct 2, 2008 11:46 AM
One other piece of good news is that as the market drops, the cost per share in TSP funds does as well. This allows input of new money into the TSP funds to buy more shares at a cheaper price. When the market returns to the higher levels, and it will, then one will have an even greater amount in one's TSP account for the percentage of new money invested during this period.
Re: Impact of the market on TSP funds
DO
Thu Oct 2, 2008 2:44 PM
TSP Decline
Customs and Border Protection
Thu Oct 2, 2008 12:10 PM
None of us our experts in the stock market. I placed my money is the 2010 Life Cycle fund in early March. While I suffered a small loss, it was definitely not a substantial loss suffered by my co-workers. The managers move the money each day, and as you get closer to retirement, it gets more conservative. It was the smartest move I made.
Relax and keep investing!
CDC
Thu Oct 2, 2008 1:16 PM
This author is correct, however, he does not go far enough. Not only should you not panic now, you should jump in! Decide what your tolerance is for the ups and downs that the TSP goes through, pick a mix of the C, S, or I funds, and plan to make systematic deposits into your TSP and leave it alone. Avoid the G and F funds. They are poor performers for long term investing. The Life Cycle funds should be avoided as well. You cheat yourself if you allow others to make your decisions.
Those that borrow against their TSP for any reason are idiots. The TSP is a long term retirement account. Do not take from it to buy a house, car or anything else. Save money to do that. Even back off the amount of contributions, but don't take loans from the TSP ever!
My point is, knee jerk reactions do not help. Whoever is president does not determine if we have food on our tables. The U.S. stock market has never lost money in any 10 year period. Relax! Keep investing! You'll be ok.
Re: Relax and keep investing!
Diversity Manager
Thu Oct 2, 2008 3:01 PM
The folks who continue to rail against anything but the G Fund get what they deserve. This reminds me of my idiot brother-in-law, Bill. (He's actually a great indicator of What Not To Do in life).
Bill moved all of his investments into the G fund last week. Before that he bought a Hyundai and laughed at my Toyota. We traded them in at the same time, with predictable results: Mine $12, 500; his $4000. Ouch.
Same thing with his house. He bought 75 miles away from town (and his office). I paid a bit more and live minutes from work. He laughed at that, too. Now he can't afford the gas to get him into work and no one wants to carpool with him (he gives unsolicied TSP advice for 75 miles--each way).
My sister will have half of what we have, TSP-wise, when we all retire. You just can't help some knuckleheads.
I bought them Investing for Dummies.
Check the Math
VA
Thu Oct 2, 2008 1:52 PM
I am 100% G Fund right now, and here's my math. I'd love to hear from anyone who has a more convincing concept. A simplistic example, space is limited:
1. Joe & Sam each have $10K in an L Fund @ $10 a share.
2. Joe stands pat, and in the succeeding year sees his share value decrease by 20%, still has 1000 shares @ $8 per share.
3. Sam moves to 100% G Fund, maintaining $10K. In that same year he sees a 4% gain = now $10,400.
4. The market reverses, the L Fund is now back up to $9 a share. Joe has 1000 shares @ $9 = $9000. Sam reenters the market back into L, so $10,400/$9 = 1156 shares.
5. Snapshot: Sam = 1156 L Fund shares in play @ $10,400. Joe = 1000 L Fund shares in play @ $9000.
Note that Sam does not have to buy at the absolute optimal "bottoming out" point to show an appreciable gain compared to Joe. He just has to be convinced some semblance of acceptable normality has returned.
So with no bottom in sight I'm Sam collecting my 4% & waiting!
Re: Check the Math
DO
Thu Oct 2, 2008 2:51 PM
Uh, you assumed that everyone but you stared at $0?
The folks in the C, S and I funds haven't permanently lost any money or shares. When you the market heads back north, the folks in the C Fund (for example) will see significant increases (much more than $400).
So those C and S Fund investors won't have $9K, they'll have more like $16,500 (vs your $10,400).
Re: Check the Math
VA
Thu Oct 2, 2008 4:44 PM
1. Start point is immaterial. I'm trying to do the best I can with the resources I have available.
2. Please understand, I am in G while the market is deteriorating & plan to come back out as soon as the market stabilizes again.
3. RE C/S/I Investors: The L Fund was given merely as an example. If you like, compare your own C/S/I situation under the same scenario, apples to apples.
The point is, do we stand pat or go to safety in G and then reenter when we accept the market's improved situation.
Another view: If I had been in the market a few days ago my account would have seen a $20K loss in a single day. To illustrate impact, recovering that $20K would require 18 months via payday contributions & matching.
But I didn't take that loss.
So while some lose $$ but keep their share count, I have my $$ intact & am gaining +/-4% in G, ready to return to CSI (or L) as I see fit, when it appears market risk factors are acceptable again.
Re: Check the Math
USDA
Thu Oct 2, 2008 4:46 PM
Re: Check the Math
DOE
Thu Oct 2, 2008 5:04 PM
The "pros" can't time the market consistently and they know a lot more than the ave. joe. If it were easy to predict, we'd all be rich.
I am currently buying stock with all new investment money, no more new money is going to the G fund.
And, I also moved a few percentage of G into I, C and S today. I'm going to slowly move from 40% G to 30% G.
I also bought more stock in my Roth IRA yesterday.
I don't know when the market will be going up again, but I do know it's going down so I am buying up more.
I won't be touching the TSP funds for 10 years, so hopefully taking more risk will pay off. If not, I will still have my FERS pension and Social Security which will provide for a bare bones income.
Re: Check the Math
ssc
Thu Oct 2, 2008 6:23 PM
Re: Check the Math
NOAA
Fri Oct 3, 2008 6:11 AM
Re: Check the Math
FCC
Mon Oct 6, 2008 8:53 AM
Re: Check the Math
Diversity Manager
Tue Oct 7, 2008 11:41 AM
If Employee "A" and Employee "B" had both started investing in the TSP at the same time (let's say 1988), where would they be now?
Employee "A" remained in the G Fund for 20 years; Employee "B" has remained consistently in the C Fund.
Where are they now?
Far from "burying her head in the sand," Employee "B" has rode the markets ups and downs to a hefty return, WAY ahead of Employee "A".
Case in point...
Re: Check the Math
FCC
Wed Oct 8, 2008 8:06 AM
Several years ago, when the concept of "shares" was introduced into the TSP the shares in each fund were set at $10 per share in each fund.
As of October 7, 2008:
G Fund shares = $ 12.6407
C Fund shares = $ 11.4287
Now, I do not advocate staying in G Fund all the time, but only when the other funds are dropping like the proverbial rock. Historically, the C, S, I Funds trend upwards most of the time. But not this year. I say, don't buy an asset while it is falling in price. Instead, buy it when it is rising in price. Why is that so hard to understand?
Well said
Diversity Manager
Thu Oct 2, 2008 1:58 PM
The author is right on point.
I know it's tough, folks, but you are NOT losing anything, as long as you keep the stocks (C, I, S, F, L--whatever). Sell them now (by moving $$ into the G Fund, for example) and you really have locked in your losses.
Please stop looking at the $ and look at the # of stocks you own. That is the true indicator of how you're doing.
We'll pull through this just fine.
Re: Well said
Oaklandon Road
Sat Oct 4, 2008 9:38 AM
Too many people think that there is "blood in the streets" and time to buy. That adage is no longer a minority view but is becoming a majority view. Sometimes old adages lose their usefullness.
tsp investment
veteran affairs
Thu Oct 2, 2008 2:16 PM
Those who didn't see this coming a year ago and started transfering to the G fund are no better than the greedy bankers and brokers who got us into this mess. At least my G fund is gaining something in the midst of all this. And NO, I couldn't ride this out I plan on retiring in a year and a big hit like this mess would have killed me.
We are all idiots in G?
DoD
Thu Oct 2, 2008 4:06 PM
I moved to the safe spot in October 07, and now I still have that amount +4% to buy stocks. Now I can buy low. P.S. I own a Toyota as well, the last one saved my life.
article
Forest Service
Thu Oct 2, 2008 7:36 PM
This article is not helpful in the least. Just keep the faith and hope things get better?? That is your advice? Do you know how long it takes to recoup losses of 30% in the market??? Ralph, I think you need to get a grip.
Re: article
veteran affairs
Fri Oct 3, 2008 5:52 AM
Re: article
VA
Fri Oct 3, 2008 9:41 AM
1. Divide a 3" line into three 1" segments, three zones.
2. Start at the left, Zone 1, High Risk, the market is in retreat. Go to G & stay there. Take the 4% & minimize loss.
3. Right side zone, Zone 3: The market is consistently producing positive results. Put your $$ out in CSI & reap the benefits of an aggressive position.
4. Center zone, Zone 2: The tricky zone. Our TSP club often uses "splits" to distribute risk as the L Funds do, we just do our own L Fund (EX: 60-40 FI "split").
Season your decisions with (1) time to retirement, (2) risk factor level you are comfortable with, (3) $$ you need in retirement based on your particular retirement plans, (4) etc (other factors).
Then move up & down the 3-part risk continuum based on market conditions & your particular situation.
Our club is primarily safe in G now, waiting.
Another way
DoN
Thu Oct 2, 2008 8:15 PM
Here is another little trick that I learned. Instead of moving the money around in the funds, take out a loan against the TSP. I have done this twice and both times the market went down soon after I took the loan. Now I get to put the money back in at a lower share price, plus interest which goes into my account so I am paying myself, and the money I borrowed is in a CD at the bank earning interest in an non-retirement account so I can have access to it whenever I want.
Reinvest at lower share price + loan interest + CD interest = more money for me :-)
*** Warning ***
To do this you have to have the money avaiable to pay back the loan. I was already going to be saving the money anyway so I just get the $$ up front and put it into a CD at the back instead of saving every month until I have enough to purchase the CD.
This is a timing thing. If you take a loan from the TSP and the market goes up you will not be better off than if you had left the money alone.
my pre-tech bubble 401K - hasn't grown since 2000
USACE
Thu Oct 2, 2008 9:03 PM
The only safe place to put money is in your mattress. I had $50K in a non-federal 401K prior to the tech bubble burst, evenly split into an S&P 500 index fund, international fund and small cap fund. The value went down to $35K with the tech bubble burst.
I did not touch the money. It just got back to over $50K this last year. That is zero growth over 8 years and I haven't got my quarterly statement yet but I am betting it is back down to $35K.
My first five years out of college were before the tech bubble exploded. I thought then that I would be a millionaire before 50. I heard a 25 year old guy tell me the same thing a couple years ago.
I don't believe any of the financial advice I have heard during my professional career - I would have been better off in a bank or savings bonds - oh yeah savings bonds go to $700 billion dollar golden parachute payouts and banks use your money to finance bad mortgages and the country is paying its bills with a credit card.
Re: my pre-tech bubble 401K - hasn't grown since 2000
VA
Fri Oct 3, 2008 11:02 AM
Fund Allocation
Military
Thu Oct 2, 2008 10:52 PM
I saw the storm clouds on the horizon a few days into the new year and moved all my money into the F and G funds thereby dodging the big drop that has played out over the last nine months. Whenever things 'bottom out' and stabilize, I'l buy back into the C, S and I funds and hopefully, make out better in the long run by riding it back up.
I'm not a smart guy, but I pay attention, and it's not hard.
PS; "It's not how much you make in the good years, but how much you avoid loosing in the bad ones."
Thank You
Tighten Your Belt
U.S Navy
Fri Oct 3, 2008 6:14 AM
I read through everybody's comments and I understand the many different schools of thought. Thinking is your most enabling tool. Sometimes it is best to learn from the comments then to respond to a comment without knowing all the facts about the individual making the comment. Age, and years left to retirement can be and most likely are the reasons for the many different schools of thought. The only advice that I have is if you can afford it increase your contributions if you are not already putting in the maximum contribution of $15,500 a year. Just remember that you have to take into account what the government matches. If you reach the $15,500 before the end of the year the government will stop contributing/matching to your TSP allotment. Also if you are under the Fers retirement system make sure you are contributing at least 5% so you will get the governments maximum matching of 5%. My understanding is that CSRS employees do not receive government matching. The $15,500 is upto you
Diversity
Bureau of Mongo
Fri Oct 3, 2008 7:15 AM
I split my TSP 75% to 'G' and 25% to 'C', and haven't touched it. I suffered some initial losses, but being able to pick up 3 shares of the 'C' for the price of 2 has been nice. When this passes (and it shall) all the extra shares will come in handy to pad my retirement a little better. I have enough time to ride this one out, but you can bet the next time I see trouble brewing on the horizon everything gets put in the 'G' fund.
Crybabies
Defense Informations Systems Agency
Fri Oct 3, 2008 10:06 AM
The three questions Mr Smith fielded right off: (isn't there gov't insurance for losses; not fair - gov't should be making up for losses; this TSP business is just too much stress-our retirement being tied to stock market just isn't right) all come from Obama voters no doubt. Poor poor pitiful me. Can't the government do something about my hemroids?
Jeeze, no wonder Fedsmith reports for the first time "Obama takes the lead among readers". They've all been on the dole so long they forgot the most basic principal in life.... "that it is hard and it is supposed to be"; and that they are privileged beyond 85% of their contemporaries who can only imagine such benefits.
We're so lazy we don't even want to apply ourselves towards outwitting happenstance; we want the government to do it for us.
Freeking bunch of priveledged nansie pansies!!!!
Diversify & observations
FAA
Sat Oct 4, 2008 7:47 AM
I didn't see it in this supposed advice article but the key to any long term investing plan is to diversify your portfolio. In the TSP we have the option to put our money in cash, stocks & bonds. The percentages we have in each should be determined by our own risk tolerance and market conditions. As for the comments to this article made by so many to buy low and sell high-- that's absolutely brilliant advice-- if you could only just pinpoint where low really is.
Was the S&P 500 low at 1400? 1300? 1200? or 1100? Keep in mind even the strongest buy and hold people normally get flushed out of a severe down market before it's over. The most steadfast normally get get taken out at or near the bottom. You can look it up if you want.
Joe
DOD
Tue Oct 7, 2008 6:55 AM
I think it was Joe Kennedy that once said "Only a sucker waits for top dollar." This economy's fundamentals are not really all that sound, and we are in a place where there is very little money left to be spent by the Amercian consumer, and many have borrowed up to their eyeballs. While stock P/E ratios are generally a result of earnings, what if the well is dry? where do these earnings come from? We are pretty well tapped out,and the rich are becoming the super-rich, while the poor are getting poorer. If you look at American History, it looks a lot like 1928. Abundant goods and services are flowing in very quickly, but with wage stagnation and high debt there is going to be more goods than dollars, hence deflation. It appears we have the makings for a really good depression or deep recession (which was made up because depression is too harsh a word). We just bailed out the billionaires, where is the investment in energy independence? Infrastructure? I guess we like repeating history.
Re: Joe
Diversity Manager
Tue Oct 7, 2008 11:33 AM
Don't Panic... Who me??
Navy
Tue Oct 7, 2008 6:40 PM
I am someone who is not close to retirement age and I went into TSP with my eyes wide open. So I am concerned but not ready to turn to jello just yet... The burning question for me and I hope someone can answer this in light of the problems in the markets is...
As I understand it with the money I put into TSP I am buying shares of a fund. That fund based on what the market does goes up and down. So... If the market was up I would be buying less shares of the fund based on cost. Conversely if the market goes down I should be buying more shares (if I don't change the amount I have originally been putting in the fund) so eventually when the market does go back up I should possibly be able to recoup what is currently being lost? Anyone???
Re: Don't Panic... Who me??
FCC
Thu Oct 9, 2008 7:59 AM
Re: Don't Panic... Who me??
Navy
Thu Oct 9, 2008 2:22 PM
That is more info than I had again thank you. Besides taking a college level course on economics is there a good source to find or learn that kind of info? In simple terms? I understand that TSP is a risk based plan but I think it might be helpful to understand the mechanics of it. i.e... Money goes into the machine and it comes out looking like this based on the conditions... Or maybe it would be too much info like knowing how they handle and cook the food in the galley... >: )
I understood what you said Chief just wish I knew why >: )
RE:Joe
DOD
Wed Oct 8, 2008 6:10 AM
DM, when your family fortune hits into the Billions I would gladly lend you an ear as well.
10/08/08
State
Wed Oct 8, 2008 3:44 PM
A day that "looked" low risk of additional market slide. I was wrong, and that was enough for me for a while.. :) I shall sit in the G, with my hands in my pockets, and WATCH THE BLINKING LIGHTS from here on out. What happens after they run out of numbers, like when it hits 0? This sell off has got to stop or they might just run out of things to sell off??
Thanks, Marty in Charleston..
CAN'T HELP IT
USPS
Thu Oct 9, 2008 1:47 PM
I can't help it. I am getting really depressed. I know my stock my dig out of this -- but I am afraid by the time it digs out of this mess either (a) I will be dead, or (b) another downturn/recession will hit. It is a vicious circle and the anxiety and stress involved is hampering my "retirement." It is hard not to sit around and worry. Should I buy the good milk I like to drink, or the icky stuff I may have to be drinking for a long time anyway. I mean it -- I am really depressed -- have lost over $50,000 since October, 2007. Guess I'll try to lay down again and forget it.....again
Diversification
SSA
Fri Oct 10, 2008 12:26 PM
In real estate the key words are location/location/location; when investing the key words are diversify/diversify/diversify. If the Internet Bubble didn't teach us, hopefully this Wallstreet Bailout period will!
ALL THE INDICATORS WERE THERE
VA/USAF
Fri Oct 10, 2008 8:51 PM
The US Government knew the market was "going down the tube." Lowering the Fed. lending rate, the tax rebate program, the increase in the price of crude oil, and etc., were indicators, and a bandaids attempt to delay the inevitable.
It's like living on the Gulf Coast, where I was born, and not watching the weather reports, and wondering why the roof has been blown away, the windows are all busted out, and there is 3 feet of water in my house.
You can not say there were no indicators, and you were not warned. The government did not want everyone to know.
I was able to "see the forest for the tree," and was prepared. There was a time in my life that I beleived and trusted the US Government, but wisdom, which was obtained through age, has taught me different.
Thank you Brother Plasitus for teaching me history.
TSP Losses not Insured by Government
DoD
Sat Oct 11, 2008 5:14 AM
I understand the TSP is not insured by our government. However, wouldn't it be nice if TSP account holders could get the same consideration and bailout from our members in Congress that the fat cats did on Wall Street, who played a major role in causing the melt-down in our economy? But then, we don't have the lobbying power of Wall Street.
It is easy to say hold on, don't sell off your stocks in the C, I, and S funds. I was well diversified in the TSP with money in all five funds; and I hung on much longer in that diversification than what seemed sensible. But when you've seen one third of your TSP account disappear in a few weeks, and you're less than three months from having to draw an annuity while the melt-down still continues, that advice is not so comforting. If one could avoid having to draw an annuity, or completely withdrawing all of a TSP account past age 70-1/2, that advice might be valid. Am I missing something that I should know?
retired, DOD
USMC
Sat Oct 11, 2008 11:10 AM
retired, DOD.
The L Funds are balanced portfolios keying on retirement date. Obviously, there are more factors than the potential date of retirement that should be used in determining your asset allocation - but...
YTD losses in L Funds
L-Income: -7%
L-2010: -13%
L-2020: -25%
L-2030: -29%
L-2040: -33%
Those are Year-To-Date, not a few weeks.
Since September 19:
L-Income: -6.6%
L-2010: -10%
L-2020: -20%
L-2030: -24%
L-2040: -27%
So, you are requiring income from your account in three months, yet you were obviously invested as if you were retiring in thirty two (32) years. Properly diversified?
I feel for you, as I felt for Enron employees. But, unlike the Enron employees you also have a pension included in your retirement plan. That softens things up a bit...
But, why should I bail out either Wall Street fat cats or you or millions of you? Sorry...
Why stay the course?
DOT/FAA
Sat Oct 11, 2008 3:08 PM
How many times has someone on TV or some web site telling you to "sit tight, don't move your money out of the stock market"? Good advice coming from self serving individuals whom themselves stayed the course and want you to go down with the ship with them. Ask yourselves, if everyone is staying put, then who is selling?
I predict the DOW will go below 7000, pehaps to 5000 before this mess is over. This isn't another internet bubble or S&L problem, it's a world wide credit swap derivative financial problem in the 50 trillion dollar range. 8500 DOW will look like a distant high when you wake up one morning, turn on CNBC, and see the futures down 1000+ points because Germany or another large country crashed over night.
Protect yourself and thank your Gov't for removing CSRS and letting you become your own financial wizard, allowing only one TSP move a month, before 12 noon. Seems like a lot happens after 12 noon that effects the market (ex. bailout vote, rate cuts). How convient.
Asset Allocation???
USMC
Sat Oct 11, 2008 10:04 PM
How many folks reading and commenting on this topic think 'Staying the Course' means a 100% investment in the I Fund, or the S Fund, or the C Fund, or the F Fund, or the G Fund?
You will be gobblin Alpo in retirement if you 'invest' solely in the G or F Funds over your working life.
Everybody with more than a seven year time horizon should still have a big chuck still in the C/S/I funds. Maybe 50% or so. Otherwise you will miss a huge piece of the run up. Will you reallocate if the market booms by 10% on Tuesday, 15% over the coming week, 20% over the remainder of the month. Or will the volatility freak you out. A 50% stock allocation right now means that another week like the last will cost you 8% or 9%. But, conversely a standard Bullish correction will gain you 11% or 12%. Then, if it holds you can allocate a piece at a time. Regretfully, you can now only make two IFTs a month.
Folks, You G Funders have missed it...
USMC
Mon Oct 13, 2008 3:04 PM
Folks,
Those of you who moved 100% into the G because of last week have missed much of the recovery. If you attempt to move your assets to the C/S/I tomorrow (couldn't today) you will just be following trends.
I am about 50% in C/S/I, 30% G, and 20% F. I missed 45% - 50% of the gains I would have made had I held my aggressive portfolio (which my age permits). However, the allocation of 25% G and 20% F as of August 15 dramatically softened the blow of the last few weeks.
I, like the rest of us, am not a wizard. And, I don't like to try to guess when the market rebounds - it still may not have done so. But the market was too squirly to allow for a good sleep at night.
So, I can accept a very good rebound now rather than try to time the market to perfection.
Now, for those who are going to miss this weeks rebound - DO NOT jump in. Take a measured approach at this juncture. There WILL be downturns.
About 2008
State
Tue Oct 14, 2008 3:08 PM
When the sky begins to darken and you can make a pretty good guess that it's about to rain for awhile then preparing for the near future makes since to me. And once the unstable conditions of a huge storm has passed then preparing for the near future also makes since to me as well. Watch, listen, read, process and decide. I have managed to stay out of (not loose) any of my max TSP contributions for the year so far. Sure could use 5 chances to move things per month. Although it sounds like 2, it's really just 1.
TSP
USDA
Wed Oct 15, 2008 1:55 PM
I don't see how you can say "leave as much as possible in the stock market and avoid locking in your losses"when the market has loss at least 12 months going back? I moved my money into the G fund a year ago to "lock in my earnings". When I see the market go up two months or so I will move it back and I won't have to play catch-up for months.
Buy and Hold Forever
DOI
Thu Oct 16, 2008 2:00 PM
The 20 year time frame for investing in the TSP might be meaningful for an employee with 10 years or less of service so far. The C fund mirrors the S&P500 Index fund more or less. Over the Last 10 years the S&P Index has been essentially flat, which means that any sum invested 10 years ago is probably about the same today. Thus, for employees with less than 5 years to go for retirement, and who may actually need the capital saved in their TSP could be on the losing end during a period of time in which the markets do not do so well.
After the 2000 market drop, it was not reasonably safe to re invest until March 2003...and it took some folks even longer to recover their losses after the 2000 drop.
Unless one has 80 years of time to take advantage of long term market averages, permanent buy and hold investing really is a myth!