Comments for Thrift Savings Plan

Comment on Stay the Course in Your TSP by Terry

Terry — Thu, 13 Nov 2008 12:05:28 +0000

Peaceful Gains,

Congratulations on your investment success! I’m glad to hear your strategy works well for you.

I am member of the dollar-cost averaging philosophy. True, neither I nor anyone I know can predict the bottom in any market. But for those people who buy in on a regular basis via payroll deductions, they are buying more shares per dollar now in the C, S and I funds than they were last year.

Every quarter I review our asset allocation. If any one fund is above its target allocation, we sell enough shares to take profit, bring the allocation back in line, and put that cash to work in the funds that are below their target allocation.

This system, I find, is fairly automatic aside from the hands-on quarterly reviews. It keeps you in the market at all times, you buy more shares per dollar as the markets decline and less shares per dollar as the markets advance.

As for my readers, the vast majority are in their 20’s and 30’s. Therefore, they should be in equities at this time of their life. I would never advocate someone approaching retirement to follow the allocation I use here.

I hope this helps clarify my philosophy and perspective.

Thanks for stopping by to read!

Terry

Comment on Stay the Course in Your TSP by Peaceful Gains

Peaceful Gains — Wed, 12 Nov 2008 19:29:15 +0000

You recommend people to “buy low sell high”. It sounds like good advice. But you are only buying low if (1) you were not buying throughout the whole stock market collapse; and (2) the stocks will not continue declining any further. Buy you were buying throughout the collapse. And you have no idea that stocks have reached bottom. So in reality you are not even buying low.

The real key to long-term investment success is shifting into stocks when they are performing well and shifting out of them when they are performing poorly. But no one can predict where stocks will head, you might object. That’s true. So many people are attempting to predict, whereas really one should just react to what the market is doing.

This strategy has worked well for us. Long-term, we outperform all of the TSP funds by a handsome margin. And right now (and since mid-June), we are completely out of the stock funds. Did we predict this market collapse? No. We were simply reacting to the price changes. By mid-June, all three stock funds were too risky for us to hold, so we got out of them.

Comment on Stay the Course in Your TSP by Susan Kishner

Susan Kishner — Tue, 11 Nov 2008 20:25:17 +0000

Where did you get your blog layout from? I’d like to get one like it for my blog.

Comment on Money isn't the only motivator - The Fort Gordon Signal by Peaceful Gains TSP

Peaceful Gains TSP — Mon, 10 Nov 2008 18:37:16 +0000

People should not bail out of the Thrift Savings Plan — it’s a very good plan. But people shouldn’t just stick their money into it and forget it. They should manage their investment. For example, when stocks become too risky, they should shift out of the stock funds. That’s what we did back in mid-June. The risk was too high back then, though few people were talking about it. Since then, the C, S, and I funds have fallen by 28%, 33%, and 38%.

Comment on Financial institutions working to reassure consumers - Dallas Morning News by Caren

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