When to modify allocation to change strategy

THE THRIFT SAVINGS PLAN ALLOCATION GUIDE Forums Message Board When to modify allocation to change strategy

This topic contains 3 replies, has 3 voices, and was last updated by  TS Paul 4 years, 7 months ago.

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    I’ve always been a “hands-off” investor. I’m currently 100% 2040 Fund. I’ve recently started educating myself and appreciate your “business cycle” method. My question is when should I make the transition from the 2040 allocation to an allocation of just the basic funds?


    TS Paul

    I can’t give any sort of individual advice, but I can tell you how I approach allocation changes in my own accounts:

    If I am reasonably convinced that the fund or stock which I am buying is trending up, I will not “average in” by buying at different times. Instead I put whatever funds I am investing to work right away.

    In contrast, if I am buying a stock or fund which is beaten up and possibly still falling, I will use the dollar-cost average strategy and invest fixed amounts over time. That results in buying more shares when the price is lower and less when it is more expensive, and results in a lower total average cost per share. So at the tail end of a recession, for example, I might move a fixed percentage from the F Fund to the S Fund each week or month to hedge against the market moving lower.

    I hope that helps a little. -ts

    The TSP Allocation Guide www.TSPallocation.com



    Could someone please explain the importance of the Distribution of Account percentages. Should they mimic my contribution allocations. Currently I’m at G:5%, F:5%, C:60%, S:25%, & I:5%. My distribution amounts are about the same. I would like to keep my contribution amounts the same but I would like to move some of my totals in my C & S funds over into my G & F funds. I have about 10 to 15 years before retirement but due to health concerns I may have to go earlier than that. Any advice would be appreciated.


    TS Paul

    Mine mimics my contribution allocation, but there is nothing magic about that. Where your existing balance is allocated makes a much bigger difference to your returns as that is where the vast bulk of your invested funds are.

    The TSP Allocation Guide www.TSPallocation.com

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