Greetings,Been pretty pleased with the progress of the TSP (military 401(k) equivalent, offered to us for about 2 years now) as it's another forced savings mechanism and accounts for about 25% of my investments now. I'm going with the S&P 500 index fund, though it also offers a government bond fund, a Wiltshire type index, an international fund, and one other I can't recall. I'm considering reallocating, as we can allocate percentage wise across the funds in any manner we choose. For now I'm 100% S&P 500. I find it amusing that Berkshire's Class B shares, at $3057 as of yesterday's closing, now cannot be bought in an IRA, unless you have some money floating in there from a previous year or from dividends! Perhaps Mr. Buffet will let us lowly run-of-the-mill folks have a Class C share, or split the Class B shares, but I put my likelihood of having Tyra Banks show up to give me a massage as slightly higher.Just wanted to say this is a fine board and the contributions are reasonable and topical. The Retire Early Home Page is a complete mess. I took it off my favorites list when over half the screen was greyed out from "ignored thread." It has a lot of good information - sort the posts according to recs and there is a considerable amount of fine analysis on there. Currently it's unreadable and I haven't the patience or the inclination. Keep up the good work here and may we all retire sooner than later! (11.4 years to go in my plan but who is counting)Mark
Mark -You might want to check out the FIRE Wannabees board.http://boards.fool.com/Messages.asp?bid=116370It's generally less active than the REHP board, but contains significantly less junk, imo.
If you are looking to reallocate, I think it would be good to put a percentage of your money in each of the other funds: Wilshire index, international fund, and government bond fund. Here's one way you could break it down:S&P 500: 50%Wilshire: 25%International: 15%Bond: 10%Good luck!
S&P 500: 50%Wilshire: 25%International: 15%Bond: 10%Just some comments.I believe that about 70% of the Wilshire 5000 Index is made up by the S&P 500, so there is plenty of duplication here. My own preference would be to just go with the Wilshire 5000, which doesn't have the problem of being branded a "managed" fund, and it gives at least a little exposure to small and midcap stocks.I personally would also eliminate the bond fund allocation if I was investing long-term (i.e. more than 5 years), especially considering that interest rates seem more likely to rise rather than fall, which would hurt bond prices and therefore bond funds.Also, the international allocation isn't necessarily a bad idea, but it isn't likely to help much. It doesn't provide as much diversification as you would think, returns have lagged the US markets over the last 30 years, and expenses tend to be higher on international funds.
If you are looking to reallocate, I think it would be good to put a percentage of your money in each of the other funds: Wilshire index, international fund, and government bond fund. Here's one way you could break it down:S&P 500: 50%Wilshire: 25%International: 15%Bond: 10%Pretty close to my allocationC Fund (S&P500) 50%S Fund (small cap) 25%I Fund (International index) 15%G Fund (Treasuries) 10%I do not have anything inthe F Fund (Leaman bond index) I just think bonds are over for a while and inflation will kill them. But I am 2 to 4 years away from retirement and hopefully 5 to 9 years before withdrawals will start. This is a fairly aggressive approach but since I will have a pension I figure that fills in for a bond allocation.
Mark...I agree pretty much with the "madCapitalist" on your allocation. The only comment that I would make would be that the Wilshire Index offered in TSP is the Wilshire 4500 Index which represents MidCap and SmallCap Companies. Your S&P 500 Index represents (or tracks) LargeCap Companies only. The two are not alike at all.http://www.tsp.gov/uniserv/features/chapter09.html#topIf it were my account, I would pretty much stay with just the S&P 500 Index Fund for the time being. Reasons are that now is really not the time to be getting into bond funds when we are probably going to see the start of an inflationary period not too far down the road. At some point you may wish to include the bond fund, but I would do a little studying on how bonds and bond funds respond to periods of inflation and deflation first.Also, a younger person can stand a little more risk in the market then a person who is closer to retirement. Stocks are inherently riskier then bonds or bond funds, hence they tend to give the investor a higher yield over extended periods of time. The S&P 500 is a really good, time-proven stock index fund and should do well for you over time. (Disclaimer - no crystal ball here)! Just my opinion.If you must reallocate at this time, my opinion would be to include some of the Wishire 4500 Index to get a little exposure to the rest of the market. Regards,Bill
If it were my account, I would pretty much stay with just the S&P 500 Index Fund for the time being.That's what I'm doing. I have 100% of my 401K in Barclay's S&P 500 Index Fund. I have the option of a Wilshire 4500 Index Fund, but I'm not comfortable putting any new money or re-directing any of my old money into anything else other than the S&P 500 at this time (as far as my 401K is concerned). Gup
Best Of |
Favorites & Replies |