Browsing: portfolio

Q. I recently retired (CSRS, law enforcement) and am trying to decide whether to leave my money in the Thrift Savings Plan or roll it over into a privately managed IRA portfolio including diverse programs that will meet my goals of growth, income, annuities and a certain amount of liquidity. If my TSP portfolio is diversified to meet the above goals, if you compare apples to apples, is the TSP considered better or worse (value performance, management, fees)  than rolling into a privately managed portfolio (with a broker I trust). A. TSP is the best retirement investment vehicle there is.…

Q. You wrote, “the presence of the G Fund allows you to configure portfolios that produce risk/return characteristics that are superior to those available anywhere else.” I’m not aware that you could configure your own portfolio in the Thrift Savings Program, other than the index funds and L funds. Are you saying one shouldn’t own even no-load, low-fee mutual funds, more narrowly targeted than broad index funds, in an IRA? A. I was referring to configuring a portfolio using the five basic TSP funds. I know of no reason to use anything other than low-cost index funds for retirement investing.…

Q. Is it possible to look at the historical rates of return of the various Thrift Savings Plan funds and predict an allocation for a nominal return of 6 percent, or am I better off looking into the Life Cycle funds and trying to predict the return from there? (Past performance of the L Fund income just falls short of 6 percent). My goal is to make an average of 6 percent per year on my current TSP balance to reach my retirement goal. A. Yes, it’s possible. But you shouldn’t rely on a prediction based on so little data.…

Q: I will be rebalancing my portfolio biannually to the initial allocation until I reach an age that justifies a change to a more conservative approach. To complete this action, do I process both an interfund transfer and a contribution allocation? Is biannually OK? A: You’re asking for specific, individual investment advice, which I can’t provide through this forum. In general, I recommend that Thrift Savings Plan investors using this do-it-yourself strategy set the contribution allocation to 100 percent G Fund and then periodically rebalance the existing assets to their selected allocation. I recommend that you rebalance no more frequently…

Successful retirement investing depends more on avoiding serious mistakes than it does on realizing exceptional gains. Cash flows from your portfolio when investment values are depressed can cause damage that won’t be repaired later by better returns. If you withdraw $10,000 from a portfolio when it is worth $200,000, you’re withdrawal represents 5 percent of your portfolio. If, alternately, you withdraw that same $10,000 from your portfolio after its value has fallen to $100,000, you’ve now withdrawn 10 percent of your portfolio’s total value. A withdrawal rate of 5 percent might be sustainable over 20 or 30 years, but a…