Search:

Custom Search

Readers' Comments

Total Comments: 14
Page 1 of 1

Which is the Best TSP Fund Over the Past Five Years? You May Be Surprised

TSP Funds

HRM Specialist
DON
Fri Nov 2, 2007 9:45 AM

Post Reply

It is interesting that I saw the writing on that wall four years ago. I have been 40% I, 40% S, and 20% C for almost four years now and very pleased that I have. My account has made positive gains in three of four quarters every year, and the losses have not been astronomical in that I still made serious gains overall for each year. With almost ten more years to go until full retirement, I expect to almost triple my account between contributions and distributions. I'm not worried about a loss here and there, I make it up in the end. I didn't even do that bad during the 1998 to 2000 debacle when I was heavy C fund.

As a civil servant, if you think about it, you are already heavily invested in the government, as you count on your pension check, possible Social Security if applicable, and then you have TSP, possible IRAs or Roth IRAs. Some of us are even receiving military pensions too, so yet another link to the government. Might as well reach out and go for the gain.

Re: TSP Funds

Attorney
DOJ
Fri Nov 2, 2007 7:02 PM
I hold a similar allocation: I-40%,S-35% and C-25% and have held this position for the last four years. If you can stomach the inevitable ups and downs and a few scary drops you will have huge gains over time. The key phrase is "over time." This allocation works best for a 20+ year investment horizen. If you have that time you can add this risk and come out big.

Re: TSP Funds

Attorney
DOJ
Sat Nov 3, 2007 9:21 AM
If TSP added a REITindex and commodities index it would cover all major asset classes andwould really be complete. Will thisever happen?

Re: TSP Funds

Supervisor
DHS
Mon Nov 5, 2007 11:26 AM
REIT is not a major asset class, it's a sector. If you want to dedicate options to certain sectors you would need to include the financial sector, the technology sector, the precious metals sector, the health care sector among others. Asset classes refer to size, location and orientation (such as domestic large cap value for instance), not individual industries like sectors do.

Re: TSP Funds

Attorney
DOJ
Mon Nov 5, 2007 8:24 PM
Sorry DHS but you are wrong--REITS are a separate asset class. An asset class is comprised of specific underlying assets. For equities the class is stocks, for fixed income the asset is bonds, for REITS the asset class is real property (quit a difference class than stocks and bonds) and for commodities the assets include precious metals, gas, oil, food stock, etc. A sector on the other hand is a subset of an asset class. For example technology stock is a sector of the equity class, high yield bonds is a sector of fixed income asset class. Hope we now have it straight.

Educating Employees about the I Fund

Deportation Assistant
ICE
Fri Nov 2, 2007 10:06 AM

Post Reply

TSP says the objective of the I Fund is to match the performance of the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index. If you follow the EAFE daily (which is known as an ETF, an exchange traded fund), it is known as the ISHARES MSCI EAFE FD (NYSE: ticker symbol is EFA) which is a “foreign large blend” fund. Looking more closely into this fund’s holdings, you’ll discover that the largest investments are Vodafone, Toyota, Royal Dutch Shell, Nokia, Nestle, HSBC, Glaxosmithkline, BP and BHP Billiton. In other words, internationally known drug and food companies, financial services, oil/gas companies and industrial materials companies are this fund’s major holdings. I think too many federal employees assume that the Foreign Fund is invested in high-risk small cap foreign companies in politically volatile countries. Perhaps TSP or you, Ralph, could get the word out to help educate federal employees about the I fund?

Re: Educating Employees about the I Fund

Analyst
DOD
Fri Nov 2, 2007 8:28 PM
Too bad it's not involved in the international small-caps or emerging markets, but you're right, the I Fund isn't what a lot of people think it is.

TSP funds

Management Analyst
DOE
Fri Nov 2, 2007 2:03 PM

Post Reply

I have been debating whether or not to more $$ and contributions to the I Fund. I was 100% vested in the L2010 fund. Yesterday (some would consider bad timely given the stock market status of yesterday) Even though my goal is to retire in 2010, I moved 10% of my TSP balance to L2040, leaving 90% in L2010. My rationale was L2040 is a more risky investment than L2010 so I would have more in the I and S funds, but still have a balanced portfolio. I'll check in 6 months and see where things are going.

Re: TSP funds

Analyst
dod
Fri Nov 2, 2007 3:54 PM
If you're using more than one L fund then you're not using L funds correctly. They are based on statistical mathmatical principles to smooth returns over time.

Article

Airways Transportation Systems Specialist
Federal Aviation Administration
Sat Nov 3, 2007 11:26 AM

Post Reply

The article talked about smaller periods of the last four years (not five), and did not seem to speak of the overall five years, like the title seemed to indicate. I was a bit disappointed, since info like this helps me to evaluate my investments in the TSP towards my retirement, and this was a bit misleading in its title.

Re: Article

Editor
FedSmith.com
Sat Nov 3, 2007 7:31 PM
The article covered the period from January 2003 - October 2007. We could have written the title state four years and ten months but, instead, we rounded it off to five years. I am not sure why four years and 10 months instead of five years makes the article less useful or why that would be a disappointment but we did not think the rounding would make a material difference for the vast majority of readers.

Re: Happy I-Fund Owner

Harry
FRA
Mon Nov 5, 2007 9:01 AM

Post Reply

I had been burned by the tech bubble, but I since I joined the Fed 7 years ago, in the past 5 years, I directed more and more of my TSP towards the I-fund. I am comfortable about putting more than 50% in the I-fund (30% in S-fund and 20% in C-fund). The market and economics of this decade (and likely into the next) are totally different than in the 90's. The growth in stock markets overseas is real. People mentioned China/India, but don't forget Latin America, Japan, and other Asian countries.

Eventually the oversea market would cool down because of strained resources, but for now I will take full advantage of this ride for the next 10 years until I retire handsomely.

I Fund

Electronics Engineer
SPAWAR
Mon Nov 5, 2007 11:12 AM

Post Reply

There is one phrase that I keep seeing missing on every discussion about the I fund--"Exchange rate". With the dollar continuing to go downward against foreign currencies, especially the Euro, this is an extra dividend that would further the advantage of the I fund.

I FUND TAX LOAD

DoDDS Educator
DODEA
Tue Nov 6, 2007 7:15 PM

Post Reply

What are some sound financial strategies to not have a big hunk of our I Fund nest egg eaten up by taxes in retirement? Thank you guys for a great financial learning opportunity!

Total Comments: 14
Page 1 of 1

Add a Comment about this Article

** All fields are required.
Note: Your comments will not show up right away. FedSmith.com selects the most insightful comments from our readers for posting. If selected, your comments will show up in the comments section after they have been reviewed and approved. See our terms of use for more information.