Federal employee, how do you choose your TSP investment?
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Anonymous
'L' |
Anonymous
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Here's how TSP Pilot stacks up against the other advisory services -
2014 TSP Advisory Services Performance BBB Invest.............................. 15.9% ($95/yr) Intrepid Timer...........................12.9% ($200/yr) Rev Shark............................... 10.0% ($199/yr) TSP Advisor............................ 10.0%.($120/yr) TSP Folio................................ 8.8% ($149/yr) Coolhand .................................. 5.6% ($189/yr) Ebbchart.................................... 4.7% (free) TSP Pilot....................................4.4% ($150/yr) TSP Wealth................................3.4% (free) TSP Key.....................................2.6% ($100/yr) TSP Max................................... 2.4% ($100/yr) Relevant.....................................2.3%.($24/yr) TSP Millionaire........................(-0.4%) ($120/yr) TSP Strategy.............................. 9.8% (free) |
Anonymous
I think you have to put these numbers in context a couple of ways. First you have to know what the goal and analytical framework of each is. Some are more aggressive than others and say so (others may or may not reveal as much about their methodology and approach). Those are more suitable for a more aggressive or younger investor. Some are more oriented towards protecting downside (I am most familiar with TSP Pilot, which is explicit about their investing framework and the goal of steady returns with downside protection) -- those are more suitable for people with lower risk tolerance or who are closer to retirement. You also must look at more than a one year snapshot, that's not going to help much. I'd love to see 10-year returns for each of those services because that will sweep in how badly they got clobbered in '07-09, and how well they've recovered. The only one I'm familiar with is TSP Pilot, which in my experience has returned ~10% annualized since 2000 (they also have an aggressive portfolio as well). I have no connection other than as a paying subscriber. That's fine considering other assets that are invested more aggressively and returned 15-20% last year. If I had used some of the other services my TSP account would've been decimated in '08-09 and I'd be way behind where I am now. One year numbers alone are a data point, but not necessarily a very useful one. |
Anonymous
Yikes, that is scary advice re 100% C. What is VIP? I've never heard of it. |
Anonymous
I believe he's referring to supplemental vision/dental plans - also known as FedVIP. https://www.benefeds.com/ The C fund is the S&P500. It's the 500 biggest companies in the US. I'm not sure why that's scary though I don't see why people wouldn't use the S fund as well. |
Anonymous
IMO any investment strategy that puts 100% in anything is foolish and asking for trouble. I know what the C fund is (duh) ... if you look at what would have happened if you were 100% C in 2008 vs. diversified among the funds, you'll see you would've gotten killed ... -37% (slightly better than S or I). The S Fund was down 38% in '08. So a portfolio of those 2 funds would get creamed. By being diversified among all the funds you reduce risk -- I cut my losses more than in half (-16% that year), saving well into 6 figures of losses I would've had in an all C Fund portfolio. And from 2000-2014 averaged ~10% annual return (including 2 down periods in 2000-02 and 2008-09). It is much harder to recover from large losses than it is to have steady smaller gains when things are up, and avoid huge losses when they go down. A 100% C fund allocation (or any equity fund especially) puts you at serious risk of getting in a hole it will take years to recover from. I don't know any competent investment advisors who recommend going all in on any one sector or holding. |
Anonymous
| VIP is he Voluntary Investment Plan, which is available to people over. 50 to "car up" I think you can add another $5500 a year, but don't quote me on the amount. |
Anonymous
| My god, I hate autocorrect - I select the thing I want, and it still changes "catch up" to "car up" |
Anonymous
11:56 (and previous) here ... yes, agree, the Catch Up contribs. are critical. I think the amount may have gone or will go to $6k or so (?). Making 8 yrs. of full Catch Ups was a big part of being able to retire early with a healthy TSP balance. |
Anonymous
He retired on Dec 31, so maybe that's what he was referring to. I'd never heard of it before. To the PP, I would have loved to have been in the C plan in 2008 100% and remained in it to buy all of those shares for pennies on the dollar. Or, if I had a crystal ball, moved all of my TSP over to C fund in Feb 2009. 
Just changed my allocation to: C - 40% S - 35% I - 10% G - 2% F - 3% L2050 - 10% |
Anonymous
The C fund is already diversified, it's 500 companies. Sure you can do S and I also but I can only assume you're talking about bonds. Sorry but people in their 20's and 30's with barely any TSP balance don't need the safety of the G find. Plenty of people have less than 50k in their retirement and have 30 years left to work. If you're that afraid of the future go buy gold. |
Anonymous
The s and p 500 is not one sector or holding! If you have the guts for it, investing all your money in the spdr in your twenties and keeping it there until you are almost retired is one of the smartest things you can do. Diversifying to small cap or intl is icing on the cake. The problem is, most people lack the courage to initiate this and the fortitude to continue it. Hence the booming advisor industry. |
Anonymous
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We currently have 100% in C funds. We decided to this after doing a little research and finding an investment strategy that went something like this (my husband knows it better and watches the markets better than me so I'll do my best) Invest 100% in C Funds, if the market going down, hold tight unless it gets below the 20 month moving average (some people use a 200 day, you can vary this), then move 100% of your money to G funds, but keep buying C. Allocate your assets back to C when the market returns to the 20 month moving average or when the price to earning ratio is below 15. We looked at graphs that demonstrated how this strategy would have worked over the last 50 years, and it's not perfect, you would lose some money when market started to plummet and miss some of the peaks and valleys, but overall you would do better than just buying and holding and it is a very simple strategy. I can't find the website we originally used, but here is a similar strategy: http://dontfearthebear.com/tsp/
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