TSP allocation/timing

This topic contains 5 replies, has 3 voices, and was last updated by  Evin 4 years ago.

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  • #17076

    Jana H

    Hope I didn’t shoot myself in the foot yesterday. Panicked and moved everything to TSP G. I’m usually a risk taker (everything in C and S, but I’m 5 years from retirement and my account is 7 figures. How/ when can I get back in the market? Should I put 100% contributions back in and leave inter fund?
    Ugh! ?

    #17077

    Evin
    Participant

    I think I probably hosed myself yesterday, panicking and moving to the G. Now I’m caught between leaving things as they are and missing the upswing over the next few day, or just chasing the market (which I think is never a good idea). Wish I could help you out, but as you can see, I’m not exactly smart on this.

    #17079

    TS Paul
    Keymaster

    Seven figures is awesome, you have been doing something right. I won’t give individual advice, but will give you my general feelings on when I move my money. Most of the time I have a strong conviction of which direction things are going to go over the medium and long term (I know I can’t begin to predict short term, so I don’t even try). As a result, if I think a particular fund is going to be the fund over the next year year, I will move there right away and then try not look at it again for a few months so I don’t second guess that decision. On occasion, if I don’t feel strongly I will average in to try to mitigate any big short term volatility – moving perhaps 25% per month until it is all in the fund where I want it to be.

    The TSP Allocation Guide www.TSPallocation.com

    #17085

    L C

    It is impossible to time the market perfectly, but I suggest moving some(10-50%) of your money back, whatever you feel comfortable with. I sense there is going to be more volatility during September, that is when you can start putting more money back in on the dips and cost average in. The correction is not over yet.

    #17086

    Bruin

    Why would you move your TSP allocation at all really, the way the markets been, one day up and next day down and up the next, if you moved your money from the S or C Fund to the G fund when you lost some of your money, now you are missing out on the rebound to gain it back or am I missing something ?

    #17088

    Evin
    Participant

    The only reason I can think of really moving it all out and keeping it out is if one thinks the “correction” is going to be large, and or long-term. Which no one can predict. OR, if you are getting into a short enough time-horizon to your retirement that you really are averse to the risk of losing a significant amount of money. When the “correction” (crash? recession?) occurred in the 2008-2009 time frame, it was a couple of years before the market even got back to the point it was just before the major downturn. That is significant when you’re within 5 or so years of being able to retire, IMO. I still shudder thinking of the amount of value in TSP I lost in that downturn because I had too much assets in the higher-volatility funds.

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