"Investors are also bracing for the release of the August U.S. jobs report on Friday. A lot is riding on this employment report, as a very strong report could give the Fed further ammunition to raise short-term interest rates for the first time in nearly a decade. Despite warnings from the International Monetary Fund that the Fed should hold off on hiking rates, a continuation of good economic data in the U.S. will make the Fed's decision that much more difficult. The Fed will have to weigh the recent global market turbulence and economic weakness in China with an improving economy here at home."
If you try to guess the number of jelly beans in a large jar, you will likely be off by a wide margin. So will most other people. However, if you average the guesses of 20 or more people, you will be astonishingly accurate.
I'm following the top 20 FantasyTSP leaders in the 360-day and 180-day categories, though the actual total number is only 28, since many overlap. My Watch List then averages the total contributions of all, giving me the same wisdom of the crowd.
I'm not going to blindly follow it. In fact, I'm surprised to find the combined G/F funds comprise only 68% of the average contributions (C/S/I are 11/15/6%, respectively). I'm more bearish and will stay in the G fund for now, but will continue to use this as one of the many tools for future allocations.
I'm sure this question has been asked before, but I can't seem to enter the right search criteria to find a related post. I was thinking about allocating my bi-weekly contributions to the G Fund and then buying into C and S during low times. Since the G Fund doesn't move much, it would act as a piggy bank until I want to buy in at lower share prices vs. bi-weekly contributes buying C and S when their prices are high.
It's been a while since I've posted a trade strategy proposal for the TSP. The strategy returns 11.4 percent annualized over approximately 28 years compared to buy and hold which averaged 4.6 percent annualized. As a caveat, I used log returns instead of the standard (P1-P0)/P0.
I know this is a more active trader forum...does anyone buy and hold? I know this is generally frowned upon here but every successful investor has been a buy-and-hold one. Over the past few months I've become very interested in it and have read some books and have 3/4 more to read. The biggest piece of into that sticks out to me is this:
Since 1802-2008 an initial investment of $10,000, with all dividends reinvested and ignoring taxes, would have resulted in a value of $5.6 BILLION with an average of 7% return annually after inflation. Bonds would have had a 3.5% return resulting in $8 Million. GRANTED that is a 206 year period...but the data doesn't lie. There is less risk if an investment is held long time - 10/25/50 years vs. if you're trying to time the system.
“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently.” - John Bogle
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