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Wizard of Odds – Part II

by Ann Vanderslice |

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.

© 2014 Ann Vanderslice. All rights reserved. This article may not be reproduced without express written consent from Ann Vanderslice.

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Ann Vanderslice

Ann Vanderslice is a federal retirement planning specialist who has worked with federal employees throughout the Rocky Mountain region since 2002. In addition to her financial services practice, she is a partner in Federal Benefits Training Network, a training and consulting firm that has conducted more than 100 on-site federal benefits seminars nationally.

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Daily TSP Rates

April 17, 2014

Fund Last Change YTD
L Income 16.9750 +0.0069 +0.94%
L 2020 22.0406 +0.0303 +1.12%
L 2030 23.7376 +0.0425 +1.19%
L 2040 25.1366 +0.0530 +1.22%
L 2050 14.2365 +0.0355 +1.23%
G Fund 14.3859 +0.0010 +0.69%
F Fund 16.1278 -0.0505 +2.45%
C Fund 24.2371 +0.0345 +1.52%
S Fund 33.7924 +0.1332 +0.36%
I Fund 25.7933 +0.1257 +0.90%
More TSP Rates | Track Your Investments