What signifies the switching of funds?

THE THRIFT SAVINGS PLAN ALLOCATION GUIDE Forums Message Board What signifies the switching of funds?

This topic contains 2 replies, has 3 voices, and was last updated by  Stephan 4 years, 3 months ago.

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  • #13643

    DanDan
    Participant

    Is the only time you switch funds is when the indicators point to a downturn in the business cycle, or is there any other event that is geared toward another fund?

    I agree this probably is temporary with the C fund out performing the S fund, but do you ever switch from the S fund when we hit a phase of the business cycle…other than a down turn?

    I am not an all in kind of guy, hence why my returns will NEVER be as good as others. As of now I basically do a 65/35 of C and S. (While in Growth/Mature stage I think?)

    Other questions:

    How is it the newest L fund is the cheapest? It does have the highest returns/most risk of the L funds, so people that just buy and hold are the only individuals in the L funds?

    I watched Meet the Press this morning and find a nice lil tid bit about Kansas and did not realize the mess they are in over the border. Is this white noise or is it a cluster over in KS?

    Under the same topic, how does the TSP react when different parties take over the House/Senate/White House?
    Or this doesn’t have a correlation at all?

    #13652

    TS Paul
    Keymaster

    In my view of the world, there are four stages of the business cycle, each of which leads to changes in my allocation. The next change, assuming things go according to script, will be to the TSP C Fund when the economy enters the growth/prosperity phase. Give this post a read for all of the gory details: http://www.tspallocation.com/current-tsp-allocation-business-cycle-phase-update-september-2014/

    Your other questions are vintage DanDan, but I will give them a shot:

    The TSP L2050 Fund has the lowest share price because it was the most recently introduced. The L Fund share prices are set at $10 per share at inception and grow from there. L2050 hasn’t had as much time to grow as the others.

    I’ve seen some recent stories on the issues Kansas is having with its budget and public services. Those stories generally blame the problems on the fiscal policies of the current (GOP dominated) government. I definitely haven’t read enough to have an informed opinion on this, but by all accounts Kansas is not enjoying the same fruits of the recovery as the rest of the country.

    There have similarly been a lot of stories lately about how much better the stock market (and by extension the TSP) has done under Democrats than Republican presidents, which is ironic given the “pro-business” reputation which the Republicans have cultivated. The numbers don’t lie, but correlation does not equal causation, and I am not smart enough to know whether the Democrats just happened to be in office during the recovery phase of the economic cycle each time or if their policies have actually caused the market to outperfom.

    I know there are statistics out there on how the market has performed with different combinations of control of the House, Senate and White House, but I don’t know those off the top of my head. I probably wouldn’t make investing decisions based on those stats however, as I don’t see how they can be dispositive when there is such a limited universe of data since the advent of the modern stock market.

    Lest anyone read any political leanings into my responses, let me just say that I am not a member of either party and despise all politicians equally.

    The TSP Allocation Guide www.TSPallocation.com

    #13724

    Stephan

    In Kansas at least, apparently if you cut taxes on the wealthy to almost nothing, then revenue responds accordingly.

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