TSP stock funds keep on keeping on

The first-quarter returns of the Thrift Savings Plans are pretty much the same as those for the 2016 year. That is very good.

The large cap stock index C fund returned 6.1 percent during the months of January, February and March of this year. The small-cap S fund returned 4.6 percent during the same period. The international stock index I fund, which often brings up the rear, returned 7.34 percent during the quarter. Which tells investors what? Just that stocks are having a good run, that a long-time loser can do very well and that markets are hard to predict. Experts who predicted the market would tank after President Donald Trump’s inauguration were wrong. So far.

Smart people, maybe, would’ve bought the I fund when it was down. As in buying low. But although most investors know the buy-low-sell-high mantra, many do just the opposite when in a real world situation. Tens of thousands of active and retired TSP investors jumped out of the stock market during the Great Recession, seeking the comfort of the steady treasury securities G fund. And they also switched their buying patterns so that during the long, upward rebound of the stock market, they missed out on stocks that were, in effect, on sale. So far.

The annual returns for stock funds are short-term. The quarterly returns are even shorter. They may tell a story, and point to the best investment path. Or not.

So do these short-term results mean something? Maybe, possibly. But do they have any long-term message?

At 10 a.m. today on our Your Turn radio show, we’ll be talking with financial planner Arthur Stein. He’ll talk about investment strategies, for just-starting-out feds, people mid-career and those facing retirement. Or already there. And how to become a millionaire via the government’s in-house 401k plan.

You can call in during the show at (202) 465-3080 or email questions to me mcausey@federalnewsradio.com before showtime.

Nearly Useless Factoid

By Michael O’Connell

A plant called “marsh mallow” was used to make some of the first marshmallows we know today. Modern recipes no longer use the plant.

Source: Wikipedia

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