Wizard of Odds – Part II

View this article online at http://www.fedsmith.com/2012/12/07/wizard-of-odds-part-ii/
By • December 7, 2012 Comments

Evidently, I was in Kansas, near Oz, when I wrote Part I of the Wizard of Odds article published earlier this week.  Thanks to several readers who caught that the wrong index was used in the discussion on the I Fund.  What I meant to say was…

If you’re looking to diversify internationally (known as the I Fund within the TSP), you may want to consider the I Fund based on Morgan Stanley’s Capital International EAFE (Europe, Australasia, Far East) Index. This index covers the equity markets of 22 countries including:

Australia Austria
Belgium Denmark
Finland France
Germany Greece
Hong Kong Ireland
Israel Italy
Japan Netherlands
New Zealand Norway
Portugal Singapore
Spain Sweden
Switzerland United Kingdom

With the European Central Bank copying the U.S.Federal Reserve’s policy and buying the debt of its failing members, there may be issues facing Europe (e.g., Greece, Spain,Portugal, Italy) that are worse than what we’re seeing in the United States.  And then there’s China, where they need 7% growth just to sustain their economy (by comparison, we only need about 4% in the U.S.).  After an industrial revolution, many Chinese who were working on infrastructure projects in southeast China have been asked to move back to their agricultural roots in western China – at a much lower earning level.  Guess who doesn’t want to go?  The I Fund has had a YTD return similar to the C and S Funds at 12.67% (again, as of 11/23/12).

One reader mentioned that a friend of his owns the website www.wizardofodds.com, a gambling website that he insists is better than gambling on Wall Street. No, that’s not an endorsement! But since there is no wizard behind the curtain to guide you in your TSP allocation decisions,  understanding the basis for each fund, the outlook for the economy, and your own tolerance for risk are still the main considerations for growing and protecting your hard-saved TSP dollars.

© 2016 Ann Vanderslice. All rights reserved. This article may not be reproduced without express written consent from Ann Vanderslice.


About the Author ( )

Ann Vanderslice has been working with federal employees to help them achieve retirement success since 2002. She is a popular speaker nationally on topics of interest to federal employees such as “Choosing the Best HealthPlan for You and Your Family” and “Allocating Your Thrift Savings Plan in Volatile Markets.” Her retirement practice operates out of the Denver Federal Center in Lakewood, Colorado.


Free Email Updates

Sign up for our free email updates to get our latest news sent directly to your inbox
  • Get our latest news in your inbox each business day
  • More news from your FedSmith.com authors
  • Get the day's closing prices for the TSP funds
  • Get notified via email when new videos are posted