Cold Hard Facts
If you are a federal employee, you should never forget these 3 TSP Rules:
Volatility in the stock market can be scary.
During the “Great Recession”, from October, 2007 thru March, 2009, these TSP funds suffered major declines:
C FUND
-55%
S FUND
-57%
I FUND
-60%
(based on fund share prices published on www.tsp.gov)
If you owned one of these funds during this time period, you likely suffered along with everyone else.
You may know someone who postponed their retirement because their TSP account declined so much.
Likewise, during the early weeks of COVID-19 lockdowns, the same TSP funds suffered thru large declines in just 30 days!
C FUND
-33%
S FUND
-41%
I FUND
-32%
(again, based on fund share prices published on www.tsp.gov)
Volatility in the stock market can be scary – especially if you don’t have a way to gauge it.
When the market collapses, all you see is your TSP balance dropping.
The TSP funds are not managed to avoid major declines. They are designed to match the performance of specific market indexes:
C FUND
S & P 500 index
S FUND
Dow Jones U.S. Completion Total Stock Market Index
I FUND
MSCI EAFE Index (Europe, Australasia, Far East) *
F FUND
Barclays U.S. Aggregate Bond Index
G FUND
Government Securities – specially issued to the TSP
(More detailed descriptions of all the TSP funds are available at www.tsp.gov)
If an index rises, the corresponding TSP fund rises. If that index falls, the corresponding TSP fund falls.
There is no attempt made to adjust the holdings in the TSP funds due to market conditions. They are always 100% invested in the stocks of the underlying index.
If you think the TSP funds are managed based on market conditions, that is incorrect.
Wouldn’t it be nice to avoid some of the extreme volatility that hits the market from time to time (like during the Great Recession or COVID-19)?
TSP Watchdog offers trend information for each of the TSP funds intended to help you avoid extreme volatility.
Every week, we update our database with the share prices of all the TSP funds. We use a Moving Average Trend Following methodology that has been used on Wall Street for decades to determine if each fund is on a positive or negative trend.
The trend of each fund guides how we approach that fund:
Positive Trend = BUY / HOLD
Negative Trend = SELL / AVOID
We deliver this trend information in a weekly email – so you are alerted whenever trends change and can take action in your TSP account if you choose.
Our weekly email includes a link to five model portfolios that range from VERY CONSERVATIVE to AGGRESSIVE in their allocation among the TSP funds. These allocations are updated any time there is a trend change for any TSP fund.
When a trend is negative, the allocations reflect moving that portion of the portfolio to the G Fund.
(Detailed descriptions of all the TSP funds, including the G fund, are available at www.tsp.gov)
When a trend is positive, the allocation reflects holding the target percentage in that fund.
You can choose to follow our models or to use our trend information to make BUY/SELL/HOLD decisions for your own preferred allocation.
We never have access to your TSP account –
nor do we ever make changes in your TSP account for you.
The final decision is always yours. We provide information intended to help you avoid extreme volatility – while still participating in market gains. We recommend you consult your financial advisor before making any investment decisions.
The simple question you have to ask yourself:
"Is it worth $12.79 per month to get professional help with my TSP?"
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* Investing internationally involves risks not associated with US investments such as foreign currency exchange rates, differences in financial account practices and possible political or economic instability. Please consult your financial advisor before considering these investment.