A bad first quarter for most TSP funds – so what?

For many Thrift Savings Plan investors, the worst thing about the year 2018, other than the weather, is that it is not 2017. The booming market of 2017 has been replaced, at least for now, with declines and market volatility.

To which financial planner Arthur Stein said, “so what?” Stein is a well-known financial planner in the Washington, D.C. area. Many if not most are active or retired feds. Several of them are self-made TSP millionaires who invested almost entirely in the stock-indexed C and S funds through good times and bad.

When the markets were down, Stein said, investors were buying low and getting more shares even as they invested the same amount of money each payday.

“The first quarter [January, February, March] of 2018 was not kind to TSP investors,” he said. “The F, C and I funds declined and stock market volatility, which was missing in 2017, returned.”

So far, he said, “the bad news is short-term but not long-term. Returns over the past 12 months were quite good.”

F Fund — US bonds — returns have been poor for some time. The F Fund share price peaked on Sept. 7, 2017, and as of March 31 was 2 percent lower. The G Fund increased 1 percent during the same period.

So what happened between this year and last? Is this normal or a signal for the prudent or faint-hearted to bail out and/or flee to the “safety” of the G Fund?

Check this space tomorrow and listen to our Your Turn radio show Wednesday. Art Stein will be the guest and we will talk about the difference a few months, even days, make in the stock market and what, if anything, you should do about it.

The show begins at 10 a.m. EST on Wednesday and livestreams on www.FederalNewsRadio.com. It will also be archived on our home page so you can listen anytime.  If you have questions for Art Stein send them to me at mcausey@federalnewsradio.com  and be sure to check the Tuesday column for more on the TSP’s performance in 2017 versus 2018.

 

Nearly Useless Factoid

By Amelia Brust

On April 6, 1786, Thomas Jefferson and John Adams visited William Shakespeare’s birthplace in Stratford-upon-Avon, England, and Jefferson took from the house a piece of a chair as a souvenir.

Source: Monticello