Stock market investments now or later and who?

[Deplorable]

But you have to understand you are 100% tied to the market and you will ride that volatility as long as that's what you choose to hold (as opposed to a 80/20, 65/35, 50/50, 30/70 allocated portfolio and understanding when and why you need to be in each). Not to mention it's not one size fits all and the investing world is as clear as mud to most (and to @OnlyOneDR 's point) so they can help navigate the emotional and rational side of getting to where you want to be (helping identify your goals and mapping out a road to get there).

This is very misleading. You can (and likely should) have an asset allocation that is NOT 100% tied to the market with index funds. Your portfolio is a sum of its holdings. An 80/20 allocation is simply 80% VOO (or whatever low cost equity index fund you choose to hold) and 20% BND (or again, whatever low cost bond/fixed-income fund you prefer).

Often times, "the investing world is as clear as mud to most" because there is money to be had from making it more difficult than necessary by unscrupulous financial advisors.

 

[Wes]

Well I ain’t eating caviar and drinking champagne by any means but it’s nice to see my money doing something. I’m still trying to figure out the whole TSP thing. Haven’t really figured out how to turn it into a tangible asset to either reinvest or just pull it to dump on my mortgage os other debt hanging over my head….

I rolled mine into an IRA when I retired. It really took off when someone actually managed it. I threw mine in those TSP lifecycle funds and forgot about it. It was not much better than a low yield savings account. The first year I put it with somebody who managed it, I had a 34% return.

 

[R Q]

I'll jump in with my EJ experience. I've had basically three investment/IRA companies since I started around '97. The first two led me terribly wrong and I finally stepped in and demanded to withdraw from the losing portfolios and finally changed companies. The first guy (not EJ) led me through a 50% total loss after 9/11. I contacted him several times about 'let's make a change" and each time he counseled me to stay in and don't miss the rebound. I finally demanded he make the change and then did it myself for a while and then found another which was EJ and highly recommended by my accountant so I went with him. He let my dwindled portfolio languish because I guess I wasn't enough of a high roller. Then he turned my account over to a new associate in his office and this guy started making changes and working my funds and making me money. He talks to me about all aspects of my financial life and I could not be happier. He has my complete trust and now we are building a SEP IRA that's separate from my old ROTH.
So yes it does depend on the actual person that you are dealing with.
I also started investing in Duke Energy on my own many years ago and that account has done extraordinary!

 

[rcalexander105]

What is there to figure out? Why touch it? Which funds are you invested in? Like in my case, if you do a split between C and S funds you're basically atching the top primary markets and will have returns that run akin to it (good and bad). Or switch to one of their managed target retirement year portfolios and never worry about it. (those are designed to change the risk over time so it is ideally "ready" by a target year when you plan to start pulling out),

TSP is just a fancy 401k. If you're not to the minimum retirement age yet (IIRC you got a way to go) then you can only withdraw for very specific things or get a big penalty hit on taxes. And unless your mortgage is a rediculous rate and/or your other dets are really high interest (like credir cards) you're making may higher returns in the TSP than you are paying in debt, so that's not a good trade.
E.g. if you have mortgage at 5% and your TSP is gaining 11%, then between them your net gain is still 6%. Think of debts as just negative investments and sum them up and go with combos that keep the sum in positive numbers.

Because you can do MUCH better inside an IRA. Those funds may not seem bad to you because the market has done 20%+ over the past couple years. I just rolled one for a guy that had something along the lines of a 12% YTD return. That may seem pretty good but not when you compare it to the 30 & 40% (literally) returns some of my clients have seen this year in their IRAs. TSPs are not fancy 401k’s (come on, do we really think the government is going to do something better than the private sector?), more times than not they offer less investment options than 401k’s and one of the biggest reasons to roll out of a 401k & into an IRA is because the menu of investment options is much more vast (thus slowing you to tailor your strategy specifically to what you need).

And those target date funds you speak of…. They’re not going to do you much better (whether it’s a target date fund inside a TSP or 401k…they’re just not great).

This is very misleading. You can (and likely should) have an asset allocation that is NOT 100% tied to the market with index funds. Your portfolio is a sum of its holdings. An 80/20 allocation is simply 80% VOO (or whatever low cost equity index fund you choose to hold) and 20% BND (or again, whatever low cost bond/fixed-income fund you prefer).

Often times, "the investing world is as clear as mud to most" because there is money to be had from making it more difficult than necessary by unscrupulous financial advisors.

You’re correct, I was referring to somebody holding all of one fund & not diversifying across multiple funds.

Also not wrong about the complexities but I’m not sure it’s necessarily unscrupulous advisors, but more the alphabet boys (in this case, SEC, IRS, DOJ, FINRA, etc.). No different than lawyers. Everybody wants to hate on those type of ppl until you need one.

I rolled mine into an IRA when I retired. It really took off when someone actually managed it. I threw mine in those TSP lifecycle funds and forgot about it. It was not much better than a low yield savings account. The first year I put it with somebody who managed it, I had a 34% return.

This right here! TSPs suck, they just do (& relatively speaking that’s an objective statement & not subjective). You’re going to do…okay, at best.

There’s a reason there’s a market (demand) for so many advisors in this world & if there wasn’t so many wouldn’t exist. It’s not for everybody & a lot of ppl may not use them. Find one that keeps your best interest front & center and doesn’t make decisions in your account based on their bottom line.

 

[Wes]

Because you can do MUCH better inside an IRA. Those funds may not seem bad to you because the market has done 20%+ over the past couple years. I just rolled one for a guy that had something along the lines of a 12% YTD return. That may seem pretty good but not when you compare it to the 30 & 40% (literally) returns some of my clients have seen this year in their IRAs. TSPs are not fancy 401k’s (come on, do we really think the government is going to do something better than the private sector?), more times than not they offer less investment options than 401k’s and one of the biggest reasons to roll out of a 401k & into an IRA is because the menu of investment options is much more vast (thus slowing you to tailor your strategy specifically to what you need).

And those target date funds you speak of…. They’re not going to do you much better (whether it’s a target date fund inside a TSP or 401k…they’re just not great).

You’re correct, I was referring to somebody holding all of one fund & not diversifying across multiple funds.

Also not wrong about the complexities but I’m not sure it’s necessarily unscrupulous advisors, but more the alphabet boys (in this case, SEC, IRS, DOJ, FINRA, etc.). No different than lawyers. Everybody wants to hate on those type of ppl until you need one.

This right here! TSPs suck, they just do (& relatively speaking that’s an objective statement & not subjective). You’re going to do…okay, at best.

There’s a reason there’s a market (demand) for so many advisors in this world & if there wasn’t so many wouldn’t exist. It’s not for everybody & a lot of ppl may not use them. Find one that keeps your best interest front & center and doesn’t make decisions in your account based on their bottom line.

100% agree about TSP. You’re left to figure it out. They’re not allowed to give you any advice, and if you’re investment illiterate you’re left to figure it out. I worked with a few guys that were constantly playing with it and moving money around, but nothing to the tune of what a true financial advisor could get you. I think it’s garbage. Others may disagree.

 

[RatLabGuy]

Because you can do MUCH better inside an IRA. Those funds may not seem bad to you because the market has done 20%+ over the past couple years. I just rolled one for a guy that had something along the lines of a 12% YTD return. That may seem pretty good but not when you compare it to the 30 & 40% (literally) returns some of my clients have seen this year in their IRAs. TSPs are not fancy 401k’s (come on, do we really think the government is going to do something better than the private sector?), more times than not they offer less investment options than 401k’s and one of the biggest reasons to roll out of a 401k & into an IRA is because the menu of investment options is much more vast (thus slowing you to tailor your strategy specifically to what you need).

And those target date funds you speak of…. They’re not going to do you much better (whether it’s a target date fund inside a TSP or 401k…they’re just not great).

I wasn't saying that TSP is better than anything or "fancier" than a 401k, only that for tax and practical / logistical purposes, its just the same as a 401k and all the same rules about what you can / can't do with the money still apply (with some weird exceptions) since @skyhighZJ referenced using it for debt paydown etc... a very different topic.

 

[RatLabGuy]

100% agree about TSP. You’re left to figure it out. They’re not allowed to give you any advice, and if you’re investment illiterate you’re left to figure it out. I worked with a few guys that were constantly playing with it and moving money around, but nothing to the tune of what a true financial advisor could get you. I think it’s garbage. Others may disagree.

IIRC you can only make 1 move a month or soemthing crazy like that?
Also - the fact they default to putting it in G fund until you designate otherwise is horseshit. I get that they do that bc its conservative and safe but its like the worse performing fund in the whole thing. As a young rookie when I joined I didn't realize this and lost out on a lot of potential growth. At the very least they could dedault to a lifecycle fund based on your age at start.

 

[Ron]

I love to sit back and read and learn from those both much smarter and more experienced than I.

I have an inherent distrust of the stock market because of ...well thats a story for a fire and drink dont wanna incriminate anyone.
Ive largely invested in real estate (and now) businesses for my retirement strategy. I had a mid sized (to me) 401k I rolled into an IRA when I left CMI.

I threw it into a fidelity IRA< lft it for a year in a target date...but knew I could do better. Researched a ton and a ton more - read a couple books. Found 2 strats that appealed to me and was torn between the two...so I split the baby.

I put half in a 3 fund Bogle head approach (research that if you dont know it and prepare to go down a rabbit hole).
I chose my 3 as:
VTI (60%)
VGIT (20%)
VXUS (20%)

Over a period of right at 10 years this has returned a blended 11.9% annual (looking at today numbers)

The other half of my 401K money I wanted to explore blue chip dividend investing. Again more research and more headaches and ultimately settled on
MMM
KO
JNJ
ABT

Money split equally 25% each on the above four.
I set those on drips and reinvest all dividends into their respective stock.
After the same time horizon this method is at 13.7% total return.

Notably I have never rebalanced the initial investment percentages.

Now should anyone else follow any of this advice?
Certainly not.
If you take your primary investment advice from an electrician on a four wheel drive forum you deserve the certain bankruptcy that should follow.

I just posted this because I found its so hard to get anyone to give specifics on what they do as a starting research point. So that's mine... Id love to hear the experts in here tell my why its dumb or sub-optimal (candid note - I probably wont change but Id love to hear why I should)

 

[drkelly]

Having 100% of your money in the stock market can be very bad IF you are getting close to retirement and don't have enough money to ride out a market crash. Two of my father's friends had this happen to them in the dot com crash of 2000. Both of them were of retirement age at that time. They both had too much money in tech stocks and tech funds. One of them had to come out of retirement after only a couple of years and the other had to work several more years than he planned.

 

[ramjo]

Well I ain’t eating caviar and drinking champagne by any means but it’s nice to see my money doing something. I’m still trying to figure out the whole TSP thing. Haven’t really figured out how to turn it into a tangible asset to either reinvest or just pull it to dump on my mortgage os other debt hanging over my head….

Pull it out and Invest in Yota axles for the meth tracker.....it's a no brainer.

 

[benXJ]

Having 100% of your money in the stock market can be very bad IF you are getting close to retirement and don't have enough money to ride out a market crash. Two of my father's friends had this happen to them in the dot com crash of 2000. Both of them were of retirement age at that time. They both had too much money in tech stocks and tech funds. One of them had to come out of retirement after only a couple of years and the other had to work several more years than he planned.

yep...good to have 6 months to 1 year of cash in a high yield savings accound for a rainy day.....deplete as needed then build it back up once market rebounds