Most pros say that when investing for the long-term you should diversify your investments, rebalance them from time-to-time, and not become panicky, or giddy, over short-term ticks in the stock market.

Yet when the going gets tough (or real good) many investors try to time the market. Their goal is to buy low and sell high. Since this involves near perfect timing and the ability to be right twice. It’s tough!

There is also the question of what is the right mix of stocks (as in the TSP’s C, S and I funds) and bonds (the F-fund) in your TSP portfolio. There is also the question of how much to have in the super-safe, never-has-a-bad day (or a very hot one) treasury securities G-fund.

Your portfolio makeup will depend on your investment tolerance, how long it is until you will start spending down your TSP account and how much work you want to put into it.

Here’s a question about the proper mix from a reader, followed by the answer from Allan Roth, a well-known financial planner. By the way, Roth’s 11 year old son has his own portfolio that beats virtually all the index funds and the “pros” who dispense advice on TV.

First the question:

What percent of their income or dollar amount should younger (20-35 year old) FERS employees be putting away for their retirement? Also, how should they allocate the funds if they don’t want to put any money in the L fund?

Human Resource personnel with our agency say it is like a three legged stool, Social Security, TSP and FERS Pension. I don’t think Social Security will amount to much for our generation, it won’t have any assets by the time I retire.

Most agencies don’t offer retirement planning until the last 5 years of your career, which is way too late for most FERS employees to save enough for retirement. Could you offer some guidance to younger employees? I will be sure to share it with all my friends, via e-mail.

Thank you so much.

Sincerely,

E.P. with the USDA

        Read more: Mike Causey

And now, Allan Roth’s response:

IF E.P can stay in the stock market for 30 years without moving in and out, as nearly all of us do, then I’d recommend the following which would be 90% stocks and 10% bonds:

30% I Fund

48% C Fund

12% S Fund

10% G Fund

I do, however, think the L fund could be superior, in that the re-balancing would happen automatically.

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Here is a link to column I liked on a young extreme saver (non-Federal).

Regards,

Allan

You can reach Allan through http://daretobedull.com/, and to e-mail me, click on this: mcausey@federalnewsradio.com

And to you and yours, a very Happy New Year!

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