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TSP

Administered by the Federal Retirement Thrift Investment Board, this defined contribution plan for federal employees has roughly 4,614,874 participants, and over $358 billion in assets under management. Ask your TSP questions and post related topics here.

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Fedjobplz  
#1 Posted : Saturday, July 02, 2016 10:19:43 PM(UTC)
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Hey guys, I recently started my fed job and I am really confused about TSP.

So right now I have invested 100% in L 2050 bond (I just turned 25). Currently I believe L 2050 invest 12.13% in G, 3.87% in f, 44.14% in C, 14.66% in S, and 25.2% in I.

After reading through the forums and doing research, I feel like investing 12.13% in G fund is a waste for my age and would like that go toward either C or split between S and I.

But I noticed that L 2050 share price is about $15 when C is about $28 S is about $36 and I is about $23 and got me confused.

So does this mean if I invest $420 (just random number) in L 2050 I would get 28 L 2050 shares which then divide into 3.3964 G shares, 1.0836 F shares, 12.3592 C shares, 4.1048 S shares, and 7.056 shares?

And if I do my own distribution like 60% in C, 20$ in I and 20% in S, I would get 9 C shares, 3 S shares and 3.65 I shares?

So this means I am better investing in L fund than doing my own distribution right?

Or am I just stupid and missing key information?

Please help... I am so confused....

ziggy29  
#2 Posted : Sunday, July 03, 2016 11:57:55 AM(UTC)
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Don't confuse share price with historical performance. Because of dividend and capital gain distributions, and because funds were created at different times, the share price is not at all indicative of performance or whether a fund is growth-oriented or income-oriented.

The share price and the number of shares are pretty much irrelevant. It doesn't matter if you own 100 shares with a NAV of $50 each or 500 shares at $10 each -- what matters is that you have $5000 invested in it. And it has nothing to do with whether or not you should be in the L fund or not.

If you like the concept of gradually getting more conservative as you get closer to retirement, then maybe the L fund is right. If you want to go with 100% equities because you are young and have several decades before retirement, then consider some mix of the C, S and I funds (I'd do something like 60% in C and 20% in the others).
Fedjobplz  
#3 Posted : Friday, July 08, 2016 9:33:16 AM(UTC)
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Thank you for your reply.

I have moved my contribution to 60/20/20.

I thought contributing in L bond meant owning shares of C funds (and other funds) then later I can sell them for their share prices.

Man... I feel stupid...
PathwaysIntern  
#4 Posted : Thursday, July 14, 2016 7:58:40 AM(UTC)
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I would read the return summary on the TSP site itself to see what funds have been performing better than others. For example, I would steer clear of I funds at the moment.

Edited by user Thursday, July 14, 2016 8:00:27 AM(UTC)  | Reason: Not specified

VetPref68  
#5 Posted : Thursday, July 14, 2016 2:13:12 PM(UTC)

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Originally Posted by: PathwaysIntern Go to Quoted Post
I would read the return summary on the TSP site itself to see what funds have been performing better than others. For example, I would steer clear of I funds at the moment.


Buy low...sell high!

PathwaysIntern  
#6 Posted : Thursday, July 14, 2016 2:39:12 PM(UTC)
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Originally Posted by: VetPref68 Go to Quoted Post
Originally Posted by: PathwaysIntern Go to Quoted Post
I would read the return summary on the TSP site itself to see what funds have been performing better than others. For example, I would steer clear of I funds at the moment.


Buy low...sell high!



In theory, yes. However, this is not how the TSP works. Below are the Calendar Year Return rates (my apologies for the bad formatting, I can't seem to get the link to post and charts don't really want to work too well)

1 2 3 4 5 6 7 8 9 10
2011 2.23% 0.41% (0.31%) (0.96%) - 2.45% 7.89% 2.11% (3.38%) (11.81%)
2012 4.77% 10.42% 12.61% 14.27% 15.85% 1.47% 4.29% 16.07% 18.57% 18.62%
2013 6.97% 16.03% 20.16% 23.23% 26.20% 1.89% (1.68%) 32.45% 38.35% 22.13%
2014 3.77% 5.06% 5.74% 6.22% 6.37% 2.31% 6.73% 13.78% 7.80% (5.27%)
2015 1.85% 1.35% 1.04% 0.73% 0.45% 2.04% 0.91% 1.46% (2.92%) (0.51%)
YTD 1.46% 1.63% 1.75% 1.76% 1.68% 0.93% 5.50% 3.87% 2.71% (3.44%)

L Income = 1

L 2020 = 2

L 2030 = 3

L 2040 = 4

L 2050 = 5

G Fund = 6

F Fund = 7

C Fund = 8

S Fund = 9

I Fund = 10
PathwaysIntern  
#7 Posted : Thursday, July 14, 2016 2:43:53 PM(UTC)
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<https://www.tsp.gov/InvestmentFunds/FundPerformance/returnSummary.html>
VetPref68  
#8 Posted : Thursday, July 14, 2016 2:45:55 PM(UTC)

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You are telling a person that has been in the TSP since 2004 how it works? Really?

And TSP is still a buy low...sell high.
PathwaysIntern  
#9 Posted : Thursday, July 14, 2016 4:21:04 PM(UTC)
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Originally Posted by: VetPref68 Go to Quoted Post
You are telling a person that has been in the TSP since 2004 how it works? Really?

And TSP is still a buy low...sell high.



Here's a cookie...

P.S I've been a. TSP user since 2002.
VetPref68  
#10 Posted : Thursday, July 14, 2016 4:41:42 PM(UTC)

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Here's a cookie...

Good for you, Intern!
VetPref68  
#11 Posted : Thursday, July 14, 2016 5:34:36 PM(UTC)

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Please tell us how TSP isn't a buy low and sell high.

You are telling us that you don't buy low (shares a x price) and hope to sell high (shares a higher y price)?

Please explain how you make money in the TSP....I mean you have "14" years of experience.....

Edited by user Thursday, July 14, 2016 5:35:22 PM(UTC)  | Reason: Not specified

Jackbnimble  
#12 Posted : Friday, July 15, 2016 6:58:07 AM(UTC)
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Back to the original question: My advice is to do only what you are comfortable with doing. It appears that you just allocated your TSP based on an internet post by someone that you don't know. I agree with the advice, it's just you need to know why you are invested with that allocation. As suggested the TSP has a website and there is another forum "TSP Talk" that you can glean some information from also. You have to be able to sleep at night with YOUR allocation.

My opinion is the L2050 and the allocation suggested above are both good long term allocations(assuming you have a long time before retirement). What we can't answer here is, if this is good for YOU. Only one person can answer that.
Jackbnimble  
#13 Posted : Friday, July 15, 2016 7:00:00 AM(UTC)
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And I have been in the TSP since 1991. Seen lots of ups and downs.
PathwaysIntern  
#14 Posted : Friday, July 15, 2016 3:15:22 PM(UTC)
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Originally Posted by: VetPref68 Go to Quoted Post
Please tell us how TSP isn't a buy low and sell high.

You are telling us that you don't buy low (shares a x price) and hope to sell high (shares a higher y price)?

Please explain how you make money in the TSP....I mean you have "14" years of experience.....


Your money is not sitting idle. You earn money by companies paying dividends, interest on bonds, and yes, selling shares higher than what they were bought for. But, that last part doesn't come from you. You could stop paying into TSP and still have your account grow. That's why it has been said multiple times on here to look at the rates of return. I want nothing more than for you to become wealthy off your TSP account, but your current strategy is not gong to help you achieve that.

Pull open your account and read your last quarterly statement. Assuming you are active daily by "buying low and selling high," I'm curious what your rate of return is.
VetPref68  
#15 Posted : Sunday, July 31, 2016 7:53:40 PM(UTC)

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The L funds are a good investment any time as they rebalance daily. Thus, if stocks drop today, they sell bonds and buy stocks and vice versa. It is an example of always buying low and selling high.
VetPref68  
#16 Posted : Sunday, July 31, 2016 8:13:14 PM(UTC)

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Originally Posted by: PathwaysIntern Go to Quoted Post
Originally Posted by: VetPref68 Go to Quoted Post
Please tell us how TSP isn't a buy low and sell high.

You are telling us that you don't buy low (shares a x price) and hope to sell high (shares a higher y price)?

Please explain how you make money in the TSP....I mean you have "14" years of experience.....


Your money is not sitting idle. You earn money by companies paying dividends, interest on bonds, and yes, selling shares higher than what they were bought for. But, that last part doesn't come from you. You could stop paying into TSP and still have your account grow. That's why it has been said multiple times on here to look at the rates of return. I want nothing more than for you to become wealthy off your TSP account, but your current strategy is not gong to help you achieve that.

Pull open your account and read your last quarterly statement. Assuming you are active daily by "buying low and selling high," I'm curious what your rate of return is.


Since they started putting it on the statements:

06/30/12: -1.03
09/30/12: 19.27
12/31/12: 12.35
03/31/13: 12.58
06/30/13: 16.13
09/30/13: 17.63
12/31/13: 22.78
03/31/14: 16.15
06/30/14: 18.37
09/30/14: 9.65
12/31/14: 6.95
03/31/15: 7.34
06/30/15: 3.44
09/30/15: -1.86
12/31/15: -0.23
03/31/16: -0.05
06/30/16: 1.63

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