Bargains Outside of the TSP

THE THRIFT SAVINGS PLAN ALLOCATION GUIDE Forums Message Board Bargains Outside of the TSP

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    Hey Paul,

    My name is Ben, and I’ve been following your site for a little over a year. I’m 20 years old, and able to invest in the TSP because of my service in the Air National Guard. I know that you try to stress the TSP investing because that is what this site is dedicated to, but do you think you could post 3 or 4 stocks/etf’s that you are currently considering buying? With the market being down I’m in full on bargain hunting mode, but a bit lost on where the best bargains could be. I’m about 85% invested in large/small cap index etf’s at the moment, and looking for a place for the other 15.



    TS Paul

    It is hard to pick just a few, but if I were starting over I would certainly look at the following:
    – I think Apple is undervalued when you look at its P/E ratio. That isn’t a stock which is going to double again in the short term because it is such a huge company, but it has continued to grow and innovate and remains my largest individual stock holding.
    – I like oil companies over the long term – energy stocks are very cyclical and I’m confident that they will swing back up to previous levels over the medium term. Right now I own Conoco Phillips, Chevron and Magellan Midstream Partners LP in that space.
    – in the biotech area, I like Gilead and Celgene.
    – my favorite in the internet space is FaceBook, which doubled for me over the past year.

    The TSP Allocation Guide



    I was wondering what your current views are on emerging markets. I’ll include my portfolio, but 20% of my current allocation is in the Vanguard Emerging Markets ETF (VWO). I know it’s a heavy weighting, but I’m twenty, ready to take the risk, and believe that emerging markets are undervalued at the moment. Here’s my portfolio-

    10% Vanguard REIT ETF (VNQ)
    10% Individual Stocks (primarily domestic energy stock)
    40% International ETF’s
    20% Vanguard Emerging Market ETF (VWO)
    5% International Small Cap ETF (VSS)
    15% International Mid/Large Cap (VEU)
    40% Domestic ETF’s
    5% US Small Cap (VB)
    5% US Extended Market ETF (VXF)
    15% US S&P 500 ETF (VOO)
    15% US Energy Sector ETF (VDE)

    Also, I’m a bit big on the domestic energy sector with about 25% of my holdings in that (between VDE and individual stocks). Am I being overzealous, or is that a fair allocation given the inevitability of oil price increases?


    TS Paul

    In my non-TSP accounts I have sizable holdings in both energy stocks and emerging markets. Emerging markets got beat up quite a bit over the last month, but I tend to believe that will see strong growth once we get past the China correction. My energy stocks are probably about even with where I bought them a few months ago at this point, are paying a nice dividend, and I believe that those are so cyclical that an upswing is all but inevitable.

    Your portfolio is a little more international than I have ever been (which doesn’t mean it is wrong, I’ve just been more comfortable forecasting the moves of the US markets), but there is nothing there which I could make an argument against.

    Good luck.

    The TSP Allocation Guide

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