Retirement Investment Approaches

That is some pretty heady stuff and I will have to look into some of that stuff on one of my insomniac nights, LOL. All kidding aside, there are a lot of seasonal generalities out there and maybe many of the ones you sighted go more in depth. But there is the January effect, the Sell in May and go away crowd, so goes the 1st 5 days so goes the entire year, buy Rosh Hashahnah sell Yom Kippur (or maybe it is the opposite I don;t remember), etc. etc etc. I personally have never bought into the seasonal ideas, but that does not mean they don;t have validity. in fact they might work within a retirement account where you are limited to funds, etc. My only thoughts regarding funds investing, etc. is to only buy on down days, since the price is set after the close. but if you do follow seasonalities, perhaps you could alter your amounts to match those seasonal patterns. But is it possible that these things have developed b/c just like technical analysis, everyone has the same numbers (support, resistance, 10, 50, 200 day moving averages, RSI's, MaCD's chart patterns, etc. etc.) and the herd mentality all congregates around these same levels?

 

I've always simply been steady with each paycheck. It's automatically withdrawn just like a bill. Technically... I never even see that money, so it's not like I am missing it. I even scrape that money off the top like a tax when I do the family budget... that way I really never see it.

So then, my only real choices is where does that money go. Which I dont think is the point of this thread.

 

CBG - you're under 30 years old? Wow.

My advice is to max out your TSP - that should be priority #1. I know that's no 'sexy', but in the long run you'll be glad you did. It's one of my biggest regrets financially - when they first started TSP I was still in the reserves and you could only put in 3% - I was an E5 and was like, "That's only like $15-20 a drill weekend!" (in my mind it wasn't worth it), so I never opened it. Then they started increasing how you could put in....then I went to OCS and returned to active duty...and it wasn't until I made O3 (in 2007) that I opened a TSP....then I didn't start maxing it out until about 5 years ago. I turn 50 this year in August, so I can put in even more starting this year. So...that's my 'lecture' to you on this subject.

On the other stuff, I do have a non-retirement brokerage and I've done well over the years...but I have lost over the years too (I'm still up, but I've done some stupid sh*t!!). One of the less 'sexy' things I'd recommend is the hedge funds. Those are good outside of your retirement accounts too.

Some of the stuff you posted I'm 100% unfamiliar with....I'll let some of the smarter guys here respond to that.

 

I meant to say "index" funds, not hedge funds. I'd keep an eye out for hedge funds about a year from now - they'll all be pouncing on a real estate rebound.

The max under 50 is $19,500. I understand, maxing it out takes a lot out of your bring home money. I'm in DC, so my BAH is pretty high plus I'm collecting my FD pension - so I have multiple income streams. I'm shooting for that 100% VA disability rating too!! (I started the process but haven't heard from the VA yet on anything).

 

Well, this is specific for my 401k. I have been maxing it out for years. There is simply noway to beat the tax savings of having $19,500 less in income.

I dont have a huge variety of choices inside my 401k. I want my choices to be spread across different sectors. I try not to overlap. I then try to weigh the fees.

For me, I am very aggressive and my generic choices are:
15% in a mid cap stock fund
5% in a real estate securities fund
10% in health science fund
25% in a science and tech fund (this one has some overlap)
10% in a small cap growth index fund
30% in a blue chip growth fund
5% in a utilities fund

I will visit these roughly every month and might make some small tweaks. I am only down 8.5% this year... so I cant complain too bad. Up 9.22% over the lifetime of this particular account.

I have an IRA that I have rolled several old 401ks into. That one is very complex and I pay to have it managed.

 

I have a brokerage w/ USAA - but USAA is getting out of the brokerage business in May and it's all rolling over to Charles Schwab. I have the USAA S&P 500 Index Fund in my Roth IRA and my non-retirement mutual fund account (I actually own 3 other different USAA funds). I also have a Vanguard and Fidelity mutual fund in my USAA Roth.

You can google "best S&P 500 index funds" and make a choice. They are all very similar, just keep an eye on the fees. USAA's funds are great on fees.

That's good you're not in the BRS, although that's a great option for people who don't plan to do a full 20 or more. And yes, it is better late than never (I was 36 in mid-2007, just shy of 37 years old, when I opened my TSP). It's well over $100K now...but should be closer to $250K had I opened it in the late 90's. I still don't understand why they only allowed 3% initially (I literally made around $250 for a drill weekend, so if I opened it then at 3% it would have been less than $10/month!).

 

@SeabeeGator you have gotten deep into the weeds with this seasonal thing and planting of crops, etc. Not bashing it at all, as it has merit, but it got me to thinking back to a guy named Arch Crawford. I am not sure if he is still around but his entire investment thesis was based on the solar system and he would periodically be on TV saying that Saturn is circling his Anus or Uranus, and Jupiter's 4th moon is about to interact with Neptune. It was some fascinating stuff, to me akin to asking the magic 8 Ball for advice (My sources say no), But if you want, you should look up Arch Crawford and watch/read some of his theories and how he determines when markets enter either bear or bull phases based on the moon, sun and stars of different galaxies.

 

Most importantly, make sure you get any match into your 401k. After that.... the options are endless.

Keep going on the 401k until you max it.

A Roth has basically endless options in whatever the stock market has to offer. That money will be tax free because it is post tax money going in. Limit is $9000 for a married couple and there are income restrictions (I think). We have a nice Roth.

You can also save into a healthcare savings plan. I think the max is $7000 per year. We max that out.

You mentioned kids... you can save into a 529. We have put $100 a month per kid since the day they were born.

Detroit has a totally different and interesting strategy.

Just do something.

 

I would say amongst most people, this is it. don;t get me wrong, saving in any way is a plus, but I find those that contribute to funds at the same time each week, bi weekly etc, don;t really ever learn anything and tend not to follow their money. And since most are limited to funds, by definition they will always be around average. Funds will have the good and the bad so they will probably end up in the middle. But here is the kicker. Most, IMO, have no idea what fees are associated with their account(s). They had some insurance salesperson help them open it up or get enrolled and little do they know that a litany of people are getting a piece of their pie every year. The fund, The person who enrolled you, that person's firm/boss/, other members of the salesperson's team. Sure maybe it is small but it adds up. Out of this terrible economic situation, something positive could be had for those who unfortunately have been furloughed/fired/laid off, etc. They can (if they choose) moved their limited choice 401K and roll it into a regular IRA (could do Roth but that may involve more taxes and problems etc.). But lets keep it simple. Since many are just in some basic fund or funds they could roll into an IRA, probably invest in the exact same funds or actually into a fund that is FREE, and they will be free of those leeches who are getting a piece of their pie every year for doing NOTHING!. And if they get rehired or get a new job, they can get back into another 401K. You want to devour some reading? Go see how much the average person who has a 401K for say 30-40 years pays in siphoned off fees over that time period. Can you say 6 figures?

 

oh man.... you gotta roll that old 401k into an IRA.