Off Topic Poker Forums

I tried to look at my portfolio online, but forgot my password. I clicked the reset pw button, and now a new one "will be sent to you in 10 days."

Oh government.

Thoughts on which of the following I should be putting my retirement $ into?

https://www.tsp.gov/investmentfunds/fundsoverview/comparisonMatrix.shtml

I'd vote either just L or a mix of everything but L where you have maybe 10-20%ish in G+F and the rest in the others. Given the expense ratios, all are pretty good.

I used to have 100% in G because fuck the police....or something like that. I just didn't trust the stock market AT ALL. I've been persuaded to mix it up though and I have a bunch of pieces in a lot of areas now. In 10 short days, I can tell you what exactly lol.

Good to know that all are at least decent.

Thoughts on which of the following I should be putting my retirement $ into?

https://www.tsp.gov/investmentfunds/fundsoverview/comparisonMatrix.shtml

i think it really depends on what you're saving for. if it's for emergencies and/or your risk tolerance is low, G all day. short-term treasuries are as close to cash there is in investing and you'll sleep good at night even if your returns are barely beating inflation. however, if inflation ever picks up, you won't be sleeping so good anymore.

personally, i think Benjamin Graham's advice is solid for passive investors even today. for simple and effective diversification where you almost never have to worry about it again, 50-50 bond-equity split. put your money in high-grade, medium-term government and corporate bonds and big company stock. adjust that ratio at most to 25-75 in either direction, depending on your risk tolerance and future plans.

as for further diversification, small cap and medium cap stocks have never been shown to significantly outperfom the broad market. first, their correlation is high with the S&P 500, and second, they give less dividends. and international stocks have historically been more volatile and underperforming compared to US stocks. it all sounds really smart to be diversified in them, but the performance has never been there.

and again, i love this DCA calculator: http://www.buyupside.com/calculators/dollarcostave.php

plug in any of these small cap and mid cap funds (try VB and VO, Vanguard's small cap and mid cap etf's) floating around and you'll see they just don't do anything all that different from S&P 500 index funds (SPY).

if you really want something that's less correlated with the broad market, you'd have to go into specific sectors like energy or real estate.

so from what you have to choose from, i'd start with 50-50 split of F and C and adjust accordingly depending on your needs. also, i agree that the fees on these funds are amazing.

so from what you have to choose from, i'd start with 50-50 split of F and C and adjust accordingly depending on your needs. also, i agree that the fees on these funds are amazing.

It's a good thing you added this paragraph because I didn't understand anything else you said.

Fwiw, this is my retirement savings plan so that should tell you where my motives lie.

It's a good thing you added this paragraph because I didn't understand anything else you said.

Fwiw, this is my retirement savings plan so that should tell you where my motives lie.

basically, the longer time you have until retirement, the more you want to have in stocks. so like n0whereman said, put 20% in F+G and 80% in stocks (even mix of C+S+I). but i'd just simplify to 25% in F and 75% in C (for reasons given above).

higher risk = higher return. just don't look at it everyday since you don't care if the market's up or down. but if the past 100 years is any indication, we assume that US stocks will go up at about 7% a year. of course, the next 100 years could be far different, so that is where the risk comes in. otoh, short-term treasuries (G fund) historically return about 2% a year, and inflation in the US has historically been about 3% a year. so you can guarantee a loss by being 100% in bonds, or you can assume a small amount of risk and gamble on the stock market.

but if retiring in 5-10 years, that's when you want 75% or more (but not 100%) of your money in F or even G fund. you want more money in bonds because you want to lower volatility and want to "lock up your win" so to speak. the last thing you want happening is delaying retirement for a few years because the stock market is down.

so this is what the L fund is doing automatically (tho it's more aggressive in having 85% in stocks at the beginning). but again, i disagree with the needless diversification that L is doing.

[bonus edit: Portfolio diversification lecture or "why it's bad to have an all-bond portfolio" by Robert Shiller (Econ 252, Yale Open Courses)]

I used to have 100% in G because fuck the police....or something like that. I just didn't trust the stock market AT ALL.

the stock market is a gamble, that's completely true. but with a sufficiently diversified portfolio, that risk is much less than people think over the long run. for example, people today talk about how the market has "failed" over the past 5 years as the S&P 500 (SPY) has returned -3%. but if you actually look at the numbers, if you had dollar-cost averaged $1,000 a month into SPY from Aug 2007 (height of the boom) to Aug 2012 today, reinvesting dividends, you would have put in $61k of your own money over that period and have a portfolio worth $79k today. quite far from a failure imo.

that's why you shouldn't sweat CNBC every day and endlessly worry about how Apple put out a bad quarterly report or how Cramer is bearish on stock XYZ and now he's bullish on stock ABC, blah blah blah. it's just noise; people creating stories out of randomness. "entertainment" as Nassim Taleb puts it.

that's why imho, investing > speculation (for the layman at least)

and a corollary to the last post: "the market sucks at prediction; don't listen to the market"
(my paraphrase of Shiller, Econ 252, Lecture 7: Behavioral Finance)

Thanks naw he'd. (lol I'm leaving that autocorrect)

I'm likely going to diversify and just hope it works out.

Ok, I finally got access to my retirement savings and put 20% in F and 80% in C.

Ok, I finally got access to my retirement savings and put 20% in F and 80% in C.

Ez peezy investing, right? oh, just be sure to re-allocate to 80% in F and 20% in C when you have 5-10 years til retirement, regardless of what's happening in the market (like a boom). if you think you'll forget (old people, lol) or be tempted to be mostly in stocks for whatever reason, you might want to go with the Lifecycle fund.

to expand on the 5-10 years til retirement strategy for re-allocation, i would look at the market 10 years out and decide if it's a good time to re-allocate or not. if the market was in a boom (bull cycle), i'd re-allocate. if it was bust (bear cycle), i'd ride it out.

the rationale is that market cycles generally last 4 years. so if there's a crash, you give the market enough time to recover, tho it may take less or more than 4 years. so waiting to re-allocate only 1-2 years out might not always work out, and i think that's how people end up delaying retirement or losing a bunch of money getting out of stocks in a bear cycle.

and a quick Google search will tell you that it only took 4 years to recover from the 1929 crash (measured from the bottom in 1932 to recovery). so that's why i like the 10 year out mark.

He didn't know how to log into his account until now. I'd suggest not bothering with strategies that involve remembering to do things 20 years from now.

He didn't know how to log into his account until now. I'd suggest not bothering with strategies that involve remembering to do things 20 years from now.

Tecmo could take a cue from Back to the Future and write a letter to his future self. only hitch is he must never move so he knows exactly where to mail it to. BTTF is a cinematic classic. it's gonna work!

Tecmo could take a cue from Back to the Future and write a letter to his future self. only hitch is he must never move so he knows exactly where to mail it to. BTTF is a cinematic classic. it's gonna work!

Send the letter to the nearest bakery. They'll know how to find him in the future.

just wanted to cap this thread with the Ibbotson SBBI historical chart:

https://www.arielinvestments.com/images/stories/Charts/Education_Charts/ibottson-2012.pdf


contrary to what i said before, small cap stocks have definitely outperformed large cap stocks in the long run, just not the past 10 years. GL on your investments, guys.

It seems to me the idea of out performing the market is... difficult. Outperforming is a zero sum game (someone has to underperform) so you're essentially taking advantage of other people's mistakes (eg. someone undervaluing a share and selling low). In this way it's like poker...

"winning" on a stock doesn't mean somebody else lost. just because someone sells a stock doesn't mean he loses when the stock goes up later since we're not taking into account what the seller bought it for initially. and more broadly, the idea that wealth creation is a zero-sum game is a fallacy. options trading is a zero-sum game, however.