Category: Long-Term Investing
As noted in TSP Investing Strategies, ten years ago Warren Buffett made a bet that a low-cost index fund resembling the S&P 500 would outperform any basket of hedge funds that might be chosen to compete against it. As you know, the TSP’s C Fund closely matches the S&P 500 index. Ten turbulent years later, the results are in: the S&P 500 (C Fund) won! The S&P 500 index fund returned 7.7% annualized over that time, compared to the miniscule … moreComments Off on C Fund Outperforms Basket of Hedge Funds Over Long Term
There was an excellent article in the back pages of today’s Wall Street Journal titled “Yes, You Can Time the Market.” It detailed a method of determining when market fundamentals are too frothy, and how to re-adjust one’s stock holdings versus bond holdings. The author focuses on the Shiller P/E ratio for the S&P 500, which currently stands at a rather high 26.31. For comparison’s sake, right before “Black Tuesday” in 1929, the ratio stood at 30, while during the … moreComments Off on Market Fundamentals as ‘Market Timing’?
The C Fund has recently produced a lot of millionaire TSP participants. Those TSP participants who started investing in the C Fund at its inception in 1988 have become or are close to becoming millionaires this year. Those who contributed enough from pay that, together with the government match, was the equivalent of the maximum deferral limit each year are now millionaires: In 1988, the deferral limit was just over $7,300, and by 2000 that limit had grown to $10,500. … moreComments Off on C Fund Millionaires
Did you experience a 3.6% pay cut this year? Those who just began their civilian federal government service this year did, probably without even knowing it. You’ll recall that lawmakers mandated an increase in contribution rates from new employees’ salaries to pay into the FERS retirement system. The new revised retirement system – “FERS-FRAE” or “FERS Further Revised Annuity Employee” – now requires a payment of 4.4% of new employees’ salaries into the system. The 3.6% figure represents the difference … more3 Comments
Warren Buffett, of course, is known for his investments in and purchases of individual companies. His Berkshire Hathaway holding company owns over 80 businesses outright and has substantial investments in the stocks of over 100 others. As the company’s largest shareholder, he is also ranked fourth on Forbes’ list of billionaires. He didn’t build his wealth by investing in index funds, but amazingly enough, he suggests that you and I should consider doing so. His Berkshire Hathaway annual letter to … more1 Comment