For the investment world, for the 401(k) and certainly the Thrift Savings Plan (TSP), the federal employee’s similar 401(k) plan, the road has been bumpy, the past few weeks ,to say the least. The Federal Employee, in most cases have their entire life rolled up in the Thrift Savings Plan. To those who know me, I sound like a crazy parrot yelling the same thing over and over again, but like a broken clock, I am right, sometimes. So, why don’t I just shut up? Because, no matter how loud I shout, there are those who have not heard the word. TSP has reported only 5% of TSP Holders have moved to the G Fund, since the market began its historic plunge.
We all remember crashes, most notably 2000, which losses took nearly 8 years to recover just in time for the losses of the 2008 crash which then took an additional 4 years to recover. The current Corona Virus crash, which we are all still trying to figure out, appears to be a historically greater loss than the two disasters mentioned above.
We are hearing rumor the promise of a charging Bull Market is about to return? Doies anyone know when? The Bull will return, that is a promise, because he always has, but that ain’t today.
The SARS epidemic lasted from January to July. The speculation for the current Corona Virus is it will last until April or May, maybe longer? Will all business and investments survive? Likely, not all.
There are two basic philosophies for building a acceptable TSP retirement fund:
- Diversify funds, stick with the plan for the long haul. The Passive Approach. or,
- Actively manage your account, watch it daily and move funds appropriately when gain is likely and when protection is required.
The Pro-Active Approach.
A recent TSP survey indicates few TSP Millionaires are passive. They are maximum contributors and active traders; watching the market and acting when appropriate. The DOW, S&P500 and NASDAQ are “time machines” with a TV screen that will show us what our TSP will look like the following day. This is a tool, free of charge to use each day so you can protect your TSP for yourself, your retirement and your family. No one should lose a penny during a period of crash. For those retiring many years from now, if you wish, you can gamble and recover, but those that are 1, 2 even 5 years from retirement, be careful, watch all information daily and make changes when needed.
TSP MARCH 27, 2020 (Source: tspfundfolio.com)
|
TSP Investment
Funds 3/27/2020 |
TSP G Fund |
TSP F Fund |
TSP C Fund |
TSP S Fund |
TSP I Fund |
| Change (1-Day) | 0.00% | 0.45% | -3.37% | -3.35% | -2.16% |
| YTD Return | 0.39% | 2.63% | -21.01% | -28.80% | -23.49% |
| 1-Year Return | 1.99% | 8.17% | -7.67% | -20.41% | -14.85% |
| 3-Year Return | 2.43% | 4.72% | 4.78% | -1.63% | -1.76% |
|
TSP Lifecycle Funds 3/27/2020 |
TSP L Income Fund |
TSP L 2020 Fund |
TSP L 2030 Fund |
TSP L 2040 Fund |
TSP L 2050 Fund |
| Change (1-Day) | -0.63% | -0.72% | -1.78% | -2.11% | -2.40% |
| YTD Return | -4.86% | -5.57% | -14.07% | -16.75% | -19.04% |
| 1-Year Return | -0.62% | -0.70% | -5.98% | -7.68% | -9.22% |
| 3-Year Return | 2.54% | 3.30% | 2.51% | 2.34% | 2.16% |
During this crisis, it is time to consider a paradigm shift. Until we are on a solid footing, the G Fund is everything. The G Fund is solid, asset preserving, a life boat and Safe Harbor all rolled into one. A high rate of return will come back, but it may be a month or two or three or four?
