Interest Rates Rising???


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  • #16968

    Looks like interest rates are going up soon.

    My financial advisor for my non-TSP investments advises to drop bonds and be 100% in stocks now (based on my position and goals).

    Assuming this is true, how should I readjust my TSP? I am currently L2030 50%, C Fund 38% and S Fund 12% with a $300K and change balance.

    Any assistance on what to do in anticipation of interest rate increases would be greatly appreciated.

    TS Paul

    I agree that the TSP F Fund will do badly as rates rise.

    I can’t give individual advice, but would point out that the L2030 Fund is only 6% F Fund, so you have very little exposure to bonds in your portfolio as currently constituted.

    The L2030 has a lot more G Fund (29%) than I would want to have except in a last resort safe haven, but otherwise is not bad. (Note that people talk about the G Fund as if it was a bond fund, but it is not. With a real bond fund, your principal can decline, but with the TSP G Fund, your principal is completely safe.)

    A little more about the TSP L2030 here:

    The TSP Allocation Guide

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