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: G 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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Feb


11

‘Accrue’ Can Be A Funny Word…

We reached the debt ceiling again last Friday, February 7. Treasury had notified Congress two weeks earlier that it “would be forced to use extraordinary measures to continue to finance the government on a temporary basis.”   One of these measures is to suspend interest payments to the TSP’s G Fund. Treasury did this as of February 10, according to the Treasury Secretary’s letter to Congress and to a TSP announcement posted today*: “G Fund & the debt limit — (February … more

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Jan


30

MyRA, Roths and the TSP

The president today signed a Presidential Memorandum directing the Secretary of the Treasury to develop “a new retirement savings security that can be made available through employers to their employees” and that offers “a low minimum opening amount…while earning interest at a rate based on yields on outstanding Treasury securities.” While not stated explicitly in the memorandum, the new “savings security” will have the same return as and function similarly to the G Fund.  The program has been termed “myRA,” … 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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Jul


31

Where Are the G Fund Earnings Coming From?

Ok, I admit it.  I read the June TSP announcement on the debt ceiling with too jaundiced of an eye. Back in early June, the Executive Director posted this message, which reads in part: “…On May 31, the U.S. Treasury notified me that it is unable to fully invest securities in the G Fund at this time. However, this will not directly impact the accounts of G Fund investors.  G Fund earnings are fully guaranteed by the Federal Government, and … more

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Jul


08

Caught in the Middle, In More Ways Than One

We are almost two months removed from when the United States hit its debt limit in May (again).  In a tiringly familiar ritual, the Treasury Secretary issued a letter to Congress describing the steps it was taking to put off default on U.S. debt. TSP participants know that among the options, “Treasury may…suspend the daily reinvestment of the Treasury securities held by the Government Securities Investment Fund (G Fund) of the Federal Employees’ Retirement System Thrift Savings Plan,” as described … more

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Jul


05

20-Something Feds Act Downright Old

A recent study of TSP participant behavior found the age group allocating one of the largest amounts to the G Fund is…20-somethings.  As a group, 20-somethings had almost 45% of their of their TSP funds allocated to the G Fund. Only 60-somethings and 70-somethings allocated more to the G Fund, at about 50% and 55% respectively.  This is according to a demographic study of TSP participant behavior from 2006 to 2010 (see slide 18). The G Fund may be the least … more

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Jun


21

TSP’s F Fund Manager Warns ‘Bond Funds…May Not Be So Safe Anymore’

BlackRock, which serves as the investment manager for the F Fund (as well as the three stock funds), has placed ads in U.S. papers over the past month warning about possible future losses of bond funds in the future. The most recent ad, appearing on page A15 of the June 18th Wall Street Journal, reads: “Once safe.  Now risky.  Rethink your bonds.” It continues by declaring: “The traditional bond funds you once considered safe investments may not be so safe … 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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Mar


28

Military Retirement and the TSP

It was around this time of year several decades ago that my father began a conversation with me about my future.  I was a high school junior, and like many high schoolers, I had vague plans about traveling, eventually getting through college, and then doing just whatever might come my way. That’s when he talked to me about joining the military.  He had been in the Army by that point almost twenty years.  As upperclassmen in high school, we were … more

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Mar


18

FINRA Investor Alert and the F Fund

The Financial Industry Regulatory Authority (FINRA) issued an “investor alert” last month discussing the risk of bonds in a potential rising interest rate environment, particularly long-term bonds. As TSP investors know, the F Fund is based on the “Barclays Capital U.S. Aggregate Index,” which is a total U.S. bond market index fund.  Thus, FINRA’s investor alert relates directly to F Fund investors. Perhaps the most important paragraph of the alert was the following: “Currently, interest rates are hovering near historic … 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


24

Suspension? What Suspension?

As most TSP participants have heard, the Treasury Secretary announced in late December that one of the steps the Treasury Department “may” take as the country hit the debt ceiling was the suspension of interest payments to the TSP’s government securities G Fund: “Treasury may…suspend the daily reinvestment of the Treasury securities held by the Government Securities Investment Fund (G Fund),” he stated in his notification to Congress.  Payments are to be made whole after the debt ceiling has been … more

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Dec


26

Debt Ceilings and the G Fund

Another year, another $1.3 trillion in debt.  The Secretary of the Treasury informed Congress by letter today that the U.S. will reach its statutory $16.394 trillion debt limit on December 31.  The letter indicated that one of the four options available to postpone default on U.S. obligations pending Congressional action is the suspension of payments to the G Fund: “Once the debt limit has been reached, Treasury may also suspend the daily reinvestment of the Treasury securities held by the … more

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Sep


17

The Pulp Fiction Fed And Your TSP

One of my favorite films is “Pulp Fiction.”  The Quentin Tarantino movie resurrected John Travolta’s career and further elevated the career of the young Uma Thurman. In one major plot line, hitman Vincent Vega – John Travolta – is charged with entertaining the wife of his mob boss while he is out of town. The wife, Mia Wallace (Uma Thurman), is easily bored and flirtatious, an obviously dangerous combination in a mob family.  Having heard the rumors of what happened … more

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