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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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VAer1  
#1 Posted : Thursday, April 23, 2020 6:11:36 PM(UTC)
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https://www.tsp.gov/Inve...dPerformance_G_Perf.html

Not familiar with G fund, not sure how to describe my question. In general, US treasury has maturity period, such as one year, three years, etc.

What if I only keep money in G fund for a while? For example, when stock market declines, then I move more money under G fund; when the stock market starts to climb again, I move money out of G fund. In such case, maybe I only keep some money in G fund for a few months, is it okay? Is it selling before maturity?

Thanks.
TheRealOrange  
#2 Posted : Friday, April 24, 2020 2:45:04 AM(UTC)
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Originally Posted by: VAer1 Go to Quoted Post
Not familiar with G fund, not sure how to describe my question. In general, US treasury has maturity period, such as one year, three years, etc. What if I only keep money in G fund for a while? For example, when stock market declines, then I move more money under G fund; when the stock market starts to climb again, I move money out of G fund. In such case, maybe I only keep some money in G fund for a few months, is it okay? Is it selling before maturity?

Yes, it is ok. No, it is not selling before maturity. The information is at the link you provided.

"The G Fund invests exclusively in a non-marketable short-term U.S. Treasury security that is specially issued to the TSP."

"The G Fund interest rate calculation is based on the weighted average yield of all outstanding Treasury notes and bonds with 4 or more years to maturity. As a result, participants who invest in the G Fund are rewarded with a long-term rate on what is essentially a short-term security. Generally, long-term interest rates are higher than short-term rates."

My emphasis. In essence, the G fund is a virtual security that adjusts its interest rate monthly, and the interest rate is determined by the long term treasuries. The G Fund's returns reflect the rate of the long-term Treasury rates, but do not require you to make a long-term commitment with your investment.
VAer1  
#3 Posted : Friday, April 24, 2020 3:35:23 AM(UTC)
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Originally Posted by: TheRealOrange Go to Quoted Post
but do not require you to make a long-term commitment with your investment.


Thanks much.

Roger.D  
#4 Posted : Friday, April 24, 2020 6:06:25 PM(UTC)
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Originally Posted by: VAer1 Go to Quoted Post

What if I only keep money in G fund for a while? For example, when stock market declines, then I move more money under G fund; when the stock market starts to climb again, I move money out of G fund. In such case, maybe I only keep some money in G fund for a few months, is it okay?

Thanks.


To answer a question you don't know you are asking, market timing is a loosers game.

Set an asset allocation that fits your risk tolorance. Then forget about your TSP.

thanks 1 user thanked Roger.D for this useful post.
Endless Summer on 4/24/2020(UTC)
Endless Summer  
#5 Posted : Friday, April 24, 2020 6:57:59 PM(UTC)
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Originally Posted by: Roger.D Go to Quoted Post
Originally Posted by: VAer1 Go to Quoted Post

What if I only keep money in G fund for a while? For example, when stock market declines, then I move more money under G fund; when the stock market starts to climb again, I move money out of G fund. In such case, maybe I only keep some money in G fund for a few months, is it okay?

Thanks.


To answer a question you don't know you are asking, market timing is a loosers game.

Set an asset allocation that fits your risk tolorance. Then forget about your TSP.



Yes, this is a much better strategy. You have to approach trading with the philosophy that you will never buy something at its lowest or sell it at its highest. If you're somewhat risk averse, go with one of the Lifecycle funds. The C, S, or I funds might be a good choice if you can handle a bit of risk.

Think of it this way, The managers of those funds routinely monitor the returns/health of the fund and make corrections as necessary. The average Joe on the street will never have the knowledge, information, or tools that these people have. So dump your money in a fund, or a combination of funds, and let the professionals do their thing.

Good luck
Roger.D  
#6 Posted : Sunday, April 26, 2020 7:22:18 AM(UTC)
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Originally Posted by: Endless Summer Go to Quoted Post
Originally Posted by: Roger.D Go to Quoted Post
Originally Posted by: VAer1 Go to Quoted Post

What if I only keep money in G fund for a while? For example, when stock market declines, then I move more money under G fund; when the stock market starts to climb again, I move money out of G fund. In such case, maybe I only keep some money in G fund for a few months, is it okay?

Thanks.


To answer a question you don't know you are asking, market timing is a loosers game.

Set an asset allocation that fits your risk tolorance. Then forget about your TSP.



Yes, this is a much better strategy. You have to approach trading with the philosophy that you will never buy something at its lowest or sell it at its highest. If you're somewhat risk averse, go with one of the Lifecycle funds. The C, S, or I funds might be a good choice if you can handle a bit of risk.

Think of it this way, The managers of those funds routinely monitor the returns/health of the fund and make corrections as necessary. The average Joe on the street will never have the knowledge, information, or tools that these people have. So dump your money in a fund, or a combination of funds, and let the professionals do their thing.

Good luck


I may be misunderstanding this statement. The funds within the TSP are much/identical to a Index Fund in the open market. The managers don't sell "XYZ" stock because they feel it is going to drop in share price. Nor buy "GHI" stock because they feel it is inexpensive comeparired to it's future. They only sell to raise money for redemptions and buy to put new money in the market.

To VAer1, the Lifestyle funds hold the individual funds C/S/I/G/F. The Lifestyle fund have a glide path of how they shift how much is in each individual fund through it's life. You can see this on the TSP website: https://www.tsp.gov/Inve...ndPerformance_L2050.html

IMO, the Lifestyle funds hold to much international stock. Historically international has laged the US market. I believe I get enough international exposure by holding the C fund. Which containe companies like Coca-Cola, Pepsi, Catapiler, Boeing, Anheuser-Busch InBev........

This link has shows what differt mixes of Stock/Bonds has returned over the long term.

https://advisors.vanguar...ics/historicalRiskReturn

Ask yourself, "where will the US economy be when I need this money"? In the short term there may be some setbacks. You can look at the carts for the DJIA and S&P500 to see all of them. But in the long term, we should be in a higher market.

If you are young, a higher amount of the C fund is normally more appropriate. As you get closer to retirement, you may chose to lower that amount. Depending on how much you have in your TSP and what your Government Pension is.

Personl note: I am in my early 50's. Prior to the market drop in Feb/March 2020, I beleived that market would be higher when I retire than it was then. I still feel this way. I have not moved any money from 1 fund to another during this time. I have increased how much I contribute each pay period. I am currently about 80/20% in the C/F funds.

There would be nothing wrong with haveing a 50/50 spit with your money.

As Endless Summer said, good luck.
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