Welcome to TSP Strategies

Welcome to TSPstrategies.com! This Web site is dedicated to exploring the benefits of saving and investing in the Thrift Savings Plan.

The companion book, TSP Investing Strategies: Building Wealth While Working for Uncle Sam, lays out a simple set of strategies for long-term, buy-and-hold investors to consider while investing in the TSP. This Web site and accompanying blog will build on those concepts, while focusing on new investing options and developments related to the TSP.

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Tag Archives: C Fund

Aug


22

Market Fundamentals as ‘Market Timing’?

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 … more

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Jul


23

C Fund Millionaires

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. … more

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Mar


03

TSP Diversification the Warren Buffett Way, and Alternatives

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 … more

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Jan


29

Will BlackRock Continue to Manage the S Fund?

TSP administrators floated a request for proposals to manage the Small Cap Stock Index Investment Fund — the S Fund — earlier this month. This is the third major RFP to manage individual TSP funds in the past 18 months. BlackRock was re-awarded the contract to run the I Fund early last fall, three months after the RFP was first released in June last year.  The contract award was made in half the time originally anticipated, with the final award expected … more

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Nov


04

Michael Kors Leaves Project Runway To Join…the TSP?

You might know of Michael Kors from one of a couple sources. You’re into high fashion, in which case you’ll know all about the designer and his fashion lines through the years. You have watched “Project Runway” up to last season, in which case you know his caustic humor.  (He departed the reality fashion design show late last year to concentrate on running his fast-expanding business.) You shop on Apple.com, in which case you’ve seen lots of Michael Kors-designed high-end … more

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Sep


15

The TSP and Facebook: An Update

Perhaps this article should be titled a “non-update,” since nothing has really happened with Facebook in the S Fund.  Really the story is how Standard and Poor’s – the company that determines the composition of the S&P 500 (on which the C Fund is based) – has avoided adding Facebook to the S&P 500. This past week, Standard and Poor’s added Vertex Pharmaceuticals and Ametek to the S&P 500, which are biotechnology and electrical components companies respectively.  Not quite the … more

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Aug


06

Will BlackRock Maintain Its Monopoly on Managing TSP Funds?

BlackRock Institutional Trust Company has managed TSP’s F, C, S, and I Funds ever since it acquired Barclays Global Investors in 2009. Now that the contracts to manage those funds are coming up for recompete, BlackRock has shown that it is looking to continue to manage the funds.  In December, it won a renewed contract to manage the F Fund for up to five years. Now the TSP is accepting Requests for Proposals (RFPs) to manage the I Fund, with … more

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Apr


08

Sell Low, Buy Higher?

The monthly interfund transfer stats for January were just posted on Friday, and based on the numbers, TSP participants appear to have regained their confidence in the stock markets and the TSP stock funds big-time. In January this year, TSP participants transferred a record amount out of the G and F Funds, while they transferred a record amount into the C and S Funds since the beginning of 2007 (when the current transfer data begins).  The I fund experienced a … more

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Feb


23

C Fund Parties Like It’s 1999

The TSP stock funds have been on a tear recently, rising on average between 7% and 11% over the past three months. Another development, however, points to the underlying strength of the companies that make up the S&P 500 and the C Fund.  S&P Dow Jones Indices – the group that oversees the S&P 500 index – noted that the number of companies that have been paying out dividends has steadily risen since the recession.  By the end of 2012, … more

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Feb


10

Will the Year of the Snake Bite the TSP?

Happy (Chinese) New Year!  On February 10th, we enter the “Year of the Snake” on the Chinese calendar.  And according to some Asian astrologers, the year might be just as ill-omened as the name sounds. According to AFP, “Astrologers say this year’s snake is identified with the element of water — symbolizing fear — that sits on top of the fire element, representing joy and optimism. They say conflict between the two will bring turbulence in May.”  In China and … more

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Jan


31

Happy 25th Birthday C Fund and F Fund!

The C Fund and F Fund turned 25 this month.  The funds first opened and began accepting investments in January 1988, and they have been growing ever since. While the Thrift Savings Plan turned 25 last April, it only had one investment option in the first year: the G Fund.  The C Fund and F Fund turned out to be slightly more complicated to implement than originally expected, thus accounting for the slight age difference. As of the end of … more

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Jan


04

Debt, Rating Agencies, and the TSP

The markets powered higher on the first trading day of the year after the limited agreement on taxes and the two-month postponement of sequestration. And the headlines for the TSP suggested the stock funds especially had a banner year in 2012.  Coming on a day when the TSP stock funds shot up 2.5%, it is tempting to think that as savers and investors, we’re out of the woods.  It just might be a good year afterall…. But recent past experience … more

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Jan


03

With Pay Reduced by Two Percent, Now What?

Given that the deal reached between Congress and the White House did not include an extension of the 2% reduction of the Social Security payroll tax – and with government wages frozen at least for now – we will see a 2% reduction in pay beginning this month. The Social Security tax rate was reduced by 2% to 4.2% for employees under the Middle Class Tax Relief and Job Creation Act of 2012 (employer contributions of an additional 6.2% rate … more

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Nov


26

A Tale of Two C Fund Stocks

As readers know, the C Fund is based on the S&P 500 index and consists of the common stock of 500 largest publicly traded US companies.  The C Fund has declined a bit of late, but nothing like some of the stocks of individual companies in the index. The C Fund hit a high of $18.40 on September 14th, before it started to trend downward ahead of the early-November election.  It then dropped to $17.13 on Friday November 16th, which … more

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Nov


12

Will Increased Dividend Tax Rates Detrimentally Impact TSP Stock Funds?

Now that the 2012 elections are over, we have some additional certainty in tax policies.  Taxes will likely go up.  These taxes will almost certainly include an increase in both the dividend tax rate and the capital gains tax rate, from the current 15% to 20% for capital gains and up to 39.6% for the dividend tax rate.  Moreover, with the Patient Protection and Affordable Care Act, an additional 3.8% surcharge will be added to capital gains and dividend tax … more

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