September 2018 TSP Allocation Update

09/12/2018

Phew! Sorry to have been away for so long. For those of you who were anxiously awaiting the baby’s arrival, we had a beautiful baby boy at the beginning of June. He is perfect in every way and everything is going very smoothly.

Everyone told me that having a baby would eat up every little bit of time, but until I was living it I didn’t understand how quickly the thousand little things you have to do each day add up to every waking moment.

I have no idea how so many people successfully pull off this parenting thing – I can’t even imagine what this would be like if I were a single parent, or my wife was going back to work, or we had twins, or money was tight, or we didn’t have health insurance, or all the other issues which could make this so much more stressful. But I do have a healthy new-found respect for all the people in my life who have been accomplishing this with much less fuss and fanfare than I have been doing it with.

I have already opened a 529 Plan for the baby and he has more money at three months than I did at 25 years. I have started drafting a post on why I selected the plan I did which I will try to finish up in the coming weeks.

For those of you who were distressed by the lack of blog posts over the past couple of months, I do promise that no matter what else is going on in life, I am still spending a lot of time looking at the economy and the markets (I get a lot of reading done during 2am feedings). And if there is ever anything which I think is worth getting excited about, I will dash off a quick post.

Back to why we are here

Bottom line up front: I will be sticking with an allocation of 50% TSP C Fund and 50% TSP I Fund in both my existing balances and new contributions this month.

It has been an eventful few months since the last time I wrote, but nothing has happened to change my overall outlook on the market. I have been disappointed by the performance of the I Fund, but as I will discuss below I am still optimistic about its prospects over the next six to twelve months as it has a lot more upside from a valuation perspective than the other stock funds do. (Please feel free to disagree, but not with any argument which is backward facing.)

Thrift Savings Plan Fund Returns

Year-to-date returns (through 09/11/2018) for the C and S funds are excellent for this point in the year and on pace for well above average gains. Hopefully we will get that Fall rally again this year to keep those moving in the right direction and the I Fund will slingshot its way back to respectability:

  • TSP C Fund:  9.46%
  • TSP S Fund:  11.78%
  • TSP I Fund:  -4.40%
  • TSP F Fund:  -1.42%
  • TSP G Fund:  1.97%

The Stupid I Fund

I take a bit of solace from the fact that the divergence in the performance of the US stock market compared to international markets is completely unprecedented. They have never been as out of step as they have been over the past year before. This has never happened before. Ever.

Typically, the US and developed markets move in the same direction over any meaningful amount of time, with the difference in performance ranging from almost nothing to double digit percentiles. That has always been the art for me – trying to divine which will outperform the other (and choosing US equities as the default when nothing nudges the decision in one direction or the other). But they do always move in the same direction.

Except recently. Right when I stuck half of my TSP balance into the I Fund. Nuts.

So what does that mean going forward? I certainly understand that for some folks who are in the I Fund right now there is a temptation to move away from the I Fund after watching it be basically flat or even down a bit while the C Fund and S Fund are performing well. And since I really and truly don’t want to come across as giving advice on what fund other people should pick, I won’t tell anyone that’s a bad idea.

But I will tell you that in investing I look for divergences like this and invest to take advance of the inevitable convergence to follow. When valuations are way outside their historical norms, they will come back. I believe that when the US and developed markets go in opposite directions, they must eventually come back together. And the further apart they get before that happens, the greater the difference in performance as they snap back. Right now the P/E ratio of the C Fund is 24.2, while the P/E ratio of the I Fund is 15 (I use that just as the simplest possible metric for comparison, there are, of course, a lot of different ways to compare the markets including variations on the P/E ratio as well as the P/E divided by growth (PEG) ratio. All of those point towards the US being over/highly valued and developed markets being undervalued at this point.)

So I am sticking with the I Fund as 50% of my allocation. Over the next six to twelve months, I believe it will in all likelihood outperform the US stock funds. That opinion is based more on valuation than relative economic strength, but I would also note that Europe appears to be earlier in its business cycle than the US, and if that is the case it also has further to run.

The I Fund might very well not outperform the US market. I thought the same thing a year ago, and look how that turned out. But I am an experienced enough investor to know (a) that everyone is wrong regularly, so I don’t lose a minute of sleep over it, and (b) that I am right more often than I am wrong, and that these decisions are how I got to where I am.

August’s Economic Numbers:

In this section I discuss the key indicator data I use in determining where I think we are in the economic cycle and what that data means to me in deciding how to allocate my Thrift Savings Plan balance. (These indicators are explained in some detail in How to Determine the Current Phase of the Business Cycle.)

Employment numbers: Total non-farm payroll employment increased by 201,000 in August, and the unemployment rate was unchanged at 3.9 percent. Job gains occurred in professional and business services, health care, wholesale trade, transportation and warehousing, and mining. I obtain this data from the Bureau of Labor Statistics.

Taking a look at the unemployment rate over the course of the year, you can clearly see that we are at the natural rate of unemployment and further significant improvements in the rate are unlikely. So we focus much more on wage growth at this stage in the business cycle. Over the year, average hourly earnings have increased by 77 cents, or 2.9 percent. That’s quite reasonable and shows the economy is continuing to grow.

Purchasing Managers’ Index (PMI): As usual, I pulled up the most recent report from the Institute for Supply Management. Any number above 50 indicates growth in manufacturing and anything over 43.2 indicates an expansion of the overall economy. The August PMI reading of 61.3 is a very strong number:

Manufacturing expanded in August as the PMI registered 61.3 percent, an increase of 3.2 percentage points from the July reading of 58.1 percent. The PMI reached its highest level since May 2004, when it registered 61.4 percent.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI above 43.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the August PMI indicates growth for the 112th consecutive month in the overall economy and the 24th straight month of growth in the manufacturing sector. The past relationship between the PMI and the overall economy indicates that the PMI for August (61.3 percent) corresponds to a 5.6-percent increase in real gross domestic product (GDP) on an annualized basis.

The last twelve months:

Yield spreads: The yield curve has gotten a lot of press lately as it has flattened, most of it very simplistic and in the sky-is-falling vein. The big thing is to note that the yield curve is flat, not inverted (inverted is when long-term interest rates are lower than short-term rates) – and an inverted curve is the traditional predictor of recession, not a flat curve. When and if the curve does invert, the rule of thumb is that a recession will begin about a year later.

I get this information from the Cleveland Fed, who has this to say:

The dog days of August continued the yield curve’s trend of the last several months, with it twisting still flatter, as short rates moved up and long rates moved down. The 3-month (constant maturity) Treasury bill rate rose to 2.08 percent (for the week ending August 24), up from July’s 2.00 percent and from June’s 1.94. The 10-year rate (also constant maturity) dropped to 2.83 percent, just down from July’s 2.86 percent, itself down from June’s 2.91 percent. The twist dropped the slope to 75 basis points, down 11 basis points from July’s 86 basis points, which was 11 basis points below June’s 97 basis points.

Despite no change in predicted growth, the flatter yield curve led to an increase in the estimated probability of recession. Using the yield curve to predict whether or not the economy will be in recession in the future, we estimate the expected chance of the economy being in a recession next August at 18.8 percent, up from the July number of 16.9 percent, and up from June’s 15.2 percent as well. So the yield curve is still optimistic about the recovery continuing, even if it is somewhat pessimistic with regard to the pace of growth over the next year.

Of course, it might not be advisable to take these numbers quite so literally, for two reasons. First, this probability is itself subject to error, as is the case with all statistical estimates. Second, other researchers have postulated that the underlying determinants of the yield spread today are materially different from the determinants that generated yield spreads during prior decades.

Possibility of recession calculated from the yield curve:

Money supply growth rate: Money Supply M2 (which includes savings deposits, money market mutual funds and other time deposits which can be quickly converted into cash or checking deposits) hasn’t been updated by the Federal Reserve since July, but the growth trend has continued this year, even if it has slowed a bit:

Money Supply M2 in the United States increased to 14147.30 USD Billion in July from 14112.30 USD Billion in June of 2018.

 

Conclusion

All of the above data leads me to believe that we remain in the Mid/Growth/Performing stage of the US business cycle and so I am going to continue to allocate the other 50% of my balances and contributions to the C Fund. The other 50%, of course, is allocated to the I Fund. If I were not currently in the I Fund, my allocation would be 100% C Fund.

The Thing I Really Like This Month

My financial life is spread out over a bunch of different accounts – I have ten accounts just for investments and banking. It always bugged me that I couldn’t immediately see a snapshot of everything in one place by clicking on an app, but I wasn’t doing that because either the decent apps couldn’t access the TSP or I didn’t trust the company which put the app out.

Over the past few months I researched and started using Personal Capital to do that. Their app is free, very simple to use, and I trust the company with my information. Their desktop site also has a ton of different tools for looking at your investments and doing research which I haven’t had time to play with yet, as well as tracking a lot of other financial information that I’m not particularly interested in, but which some other folks will love (budgets, spending and cash flow, for example).

Personal Capital isn’t doing all of this as a public service, of course. They are hoping that you will start out using their free app and information and then move on to having them manage your money. But I have been using it for about six months and there is zero pressure to do so. When you sign up, you do have to schedule a call with an advisor as part of the process, but when you get the email confirming the call you can just cancel it with a response that you are just exploring their free offerings. I did do the call just out of curiosity and had a nice chat with a smart guy in San Francisco who told me it was pretty clear I didn’t need any help just now, but pointed me towards some tools on their website and encouraged me to talk to him again as I got closer to making financial decisions around retirement.

The Next Update

I promise I won’t go as long between posts again. I will shoot to get the next one out in early November, after all the October numbers are in.

I send out a notification of these updates (or allocation changes during the month) to the email list which you can subscribe to here: Subscribe. If you want to see what I am reading throughout the month, I also have a twitter account to which I occasionally post items of interest which I stumble across for investors, Feds and the military: @TSPallocation

What’s in it for me?

I don’t ask anything except that you share the site with your colleagues so we can continue to expand the community of feds and service members helping each other in a free, transparent, no-pressure environment (although if you want to, you can donate to support the site here). You can help by telling the person sitting next to you, linking to this site from your own webpage or blog, liking it on Facebook, sharing on Twitter and in other investing forums, or actively participating on our Message Board. So if you found this post useful, please share it with your friends and colleagues using the email and social sharing buttons below right now. Thanks!

90 thoughts on “September 2018 TSP Allocation Update”

  1. TSP Paul congrats on your healthy baby boy! I look forward to your posts every month but understand that somethings in life are far more important. It is good to have you back and we appreciate the update.

  2. Congrats on your new addition to the family. I’m curious as to why you’d hypothetically be 100% in the C fund versus 100% in the S fund since the performance has been better. Or 50/50.

    I’m about 50/50 in both and I’m trying to ascertain if that’s a sound plan.

    Any background you can provide would be greatly appreciated.

    1. I don’t have the numbers in front of me, but as I recall all the goods subject to proposed tariffs would constitute about 2% of trade. So while potentially devastating to particular sectors and companies (and likely to cause short term volatility), unlikely to have a broad impact long term.

  3. I felt the exact same way after my baby girl was born last year. I marveled at the fact that every single adult person had someone, or someone(s) who did enough care (even if it was abysmal) to get them to adulthood. Granted, there’s a lot of dysfunctional people out there so maybe minimal care to survive still isn’t enough. That said, next year this time is a-whole-nother ball game with a 1 year old. 8-12months so far, for me, has been the best…enjoy!

  4. Congratulations on the new baby boy! I was where you are six years ago and it will go by far faster than you realize. Enjoy your time with your son and cherish every moment! Thanks for everything you do!

  5. The difference between US markets and developed nation markets is that the markets occasionally ignore valuations. Like the 1999 dot.com (and S&P 500, NASDEX) run up. It appears we might be headed into such a period, maybe not (and this dip in the I fund is a head fake), or maybe it will not be as severe as some of the pervious. Add to that the strength of the dollar, and the currency woes of Argentina and Turkey (and others which are struggling) , which can spread. Over all this could be affecting the current valuation of the I index because of anticipation of troubles. The trouble cause by the anticipated currency woes, would not affect the US as much as Europe and Japan.
    .
    As a valuation play, the I fund makes sense. But sometimes the markets do not make sense. in the very near term, 3 months say, I expect the S fund to out perform the I fund. That could go on for another year or so. Then – watch out.

  6. Thanks for your update as always and congratulations on the arrival of your child! I’ll echo others and tell you to enjoy each day with your son as they will pass oh so quickly. My little girl is now 24 and so much further ahead than I was at her age. Sometimes they do learn from us old parents:)

  7. Glad to have you back! For now I am 50 c and 50 s. I will see how things go in a month or so. Maybe 100 C… not so sure about F right now. But I am SO grateful for you input on all of this!!! Welcome back!

  8. Congratulations! Wonderful!

    And thanks for taking time to post this latest update.

    I found it curious that you did not mention the ongoing trade war tensions and Brexit, which is what I mostly blamed for the I Fund’s poor performance these past months. Any thoughts on that?

  9. Hi TS Paul, I am new to investing and I have been trying to absorb as much information and identify the root causes of things so I can make more informed decisions in the future. I was wondering if you had any thoughts on why the S fund has done so well in the last 5-6 months and now having the ability to look back would you say there were any indicators you might have been able to identify that could have clued you into its performance up to this point?

    I am currently 40/40/20 S/C/I and 50/50 VOO/VFX and looking to move 50/50 C/I and 50/50 VOO/VEA to try and take advantage of the undervalued international markets.

    Thanks for your informative website and congrats on the baby!

  10. Very interesting info about the I fund and how it “usually” tracks the US Market. I have been in TSP since before they had share prices and all shares were priced at $10 on May 31, 2003. If you want to look at long term performance this is an easy to do it. As you can see from the current share prices, the I Fund isn’t that much of a loser. I have read many comments on other sites that were really negative on the I Fund. I’m investing 20% in I and keep about 20% in the I Fund. I rebalance back to 20% on a quarterly basis.

  11. Congrats on your son.
    Looking to invest in a low risk product for about 10 years. What would be your thoughts?
    Thanks for what you do, I get very excited to tead your emails.

  12. Hello! I’m new here and the entire investment strategy is confusing and stressful. I have about 4 more years to retirement and have not planned as well as I should have. Being only 4 years out, and not willing or wanting to take a loss, what do you recommend? I’m currently 100% G Fund because losing the little money I have would be devastating at this point. I’m contributing 15% with the additional 5% matching. Also, do you mind me asking what your average rate of return is so far this year? Thanks!

    1. I understand your concern. What I decided was to do exactly what he does…because I will never understand this stuff as much as others. The year before I did this I was in the negative…now, my returns are 10-14% each year!

    2. Well, if you’re unsure, you could follow Mike Miles’ (on Federal Times) advice and choose the L fund which corresponds most closely to your life expectancy. For example, if you were born in 1963 and currently age 55, you could put your money in the L2050 if you’ll think you’ll live to around 87 or L2040 if life expectancy is 77 etc.

  13. Good to have you back and glad to hear your priorities are in order! Having kids made me much more aware of where my time is spent and as I got to know them more I was more happy to spend that time with family; even though it’s difficult seeing time for other things in general dwindle. Kids are a blast.

    I’m interested in your thoughts on the international weighting of the C fund. Aren’t many of the stocks in the S&P 500 international anyway? I also read that international isn’t really sheltered from a domestic recession / late phase and still under-perform the G/F fund.

    I also think it’s telling you’d rather be in the C fund were you not already invested in I. Can you expand on this? Why not switch to what you think will perform better? Are you worried about “locking in losses”?

  14. Congratulations on the birth of your son. Thank you for a well reasoned explanation of your current TSP position. It is an interesting one and one that I find completely intriguing. I agree that everyone should have some money in I fund. In fact I believe that everyone that has money in the I fund will be the beneficiary of entry into the new I Fund which I think will be a nicer broad based mix of international stocks.

  15. Congrats on the expansion of your family Paul and Thanks for your expert consult. I have followed your and your advice for nearly a decade. I started out with no knowledge of the market at all. G fund was all I knew. 7 years in the system and I only had 75k. I am now 47. My wife and I have learned from your advice and suggested readings. I am closing in on reaching 401k. I have also shared your site with other coworkers and the are also successful. Thank you so much. God bless you and yours.

  16. Oh man I fund is a terrible choice. Emerging markets are roiled with currency deflation due to the strength of the US dollar, in turn bolstered by the Federal Reserve finally drawing down its balance sheet after a decade of quantitative easing. Which is likely to continue for some time. You’re going to lose a lot of money in the I fund. Same with your S vs. C choice. Small caps generally sell goods/services domestically and are insulated from a strong and rising US dollar, which will hit large cap stocks more. That plus tariff woes have made the S fund the better choice.

  17. I have been up to 40 percent in the s fund recently. But, after research, I think I am going to follow your distribution again. . Moving back to 50 C and 50 I . Will reevaluate at the end of the year. Thanks for your great info and input!

  18. I am very sorry your original post from January didn’t age well but I think your reasoning is sound. After being 50C/50S for the past few years, I think it’s time to move a big chunk into the I. Fingers crossed!

  19. As always, THANKS for sharing like you do – and congrats on the baby! My babies are all grown and gone – I’m retired now and doing OK – thanks in part to following you the last several years. I’m a wee bit heavier in the G fund than you, but your logic sure applies into retirement, and I am only 10% in the G fund – otherwise in C and I – I’m in it for the long haul.

  20. Hey Paul. Did you ever write the post about which 529 you chose and why? If so can you refer me to it please. Thanks so much and congrats on the new baby!!!

    1. Paul mentioned, near the beginning of the year, that he would be tempted to move 100% into the I fund if he were a younger investor. Depending where you are in age and savings, moving more into the I fund would be consistent with what he’s said in the past. Not sure if that forecast has changed any, though. Maybe Paul can say more.

  21. I’m 50% in the I and 50% in the C and now my PIP is -2%! I’m trying not to freak out but that’s the lowest it’s ever been. Anyone else worried?

  22. This is my simple strategy.

    1) It’s the perfect time to sit down to reevaluate my risk tolerance. During the last ten years there has been perhaps two or three corrections that seemed really bad at that time, but in hindsight it was nothing but a little blip. However feelings are important and the more I stress about the market’s volatility, the more I believe I should be in the G fund even though I’m giving up potentially higher gains. So I was 80 stocks / 20 bonds before, but I’m moving to 60 stocks / 40 bonds. Nothing too dramatic, but significant enough where it better reflects my risk tolerance.

    2) I’m going to do my best to stop checking the market and financial news. Really. I’ve been DCA’ing for more about 15 years now and I’ve got another 20 years to go, so why worry so much about the daily movements of today?

    1. Hi Jeff. Here is my solution to the risk tolerance issue. I use L Income at 65% C fund @ 20% and S fund @ 15%. It puts my bond/equity at 52/48. I use L Income for its high balance in G, the 4.5% annual rate of growth and the daily rebalancing. It remains at the same levels on each fund within L Income so it is easy to keep a good solid mix at whatever level you wish to use.

      1. That’s a nice SWAN (“Sleep Well At Night”) portfolio and sounds like a good plan for peace of mind with decent equity exposure.

  23. I agree and hope that others will see the mix for what it is. Not everyone needs that “swan” but some of us do. I plan on using my TSP. I don’t plan to deplete it but if by the time I reach 70.5 (RMD time) I expect to have at least lowered my RMD amount by 1/3. Any legacy money we have to pass to our only child will probably come from our mortgage free home but that is because we are fortunate to have two pensions (5k+ a month) 2 SS checks (not yet picked up but should equal another 4.5k a month. TSP is just our play money.

  24. So I took a look at Paul’s economic indicators myself today and I don’t see much change in anything other than the yield curve prediction is showing flat for sure, but the overall prediction of a recession is essentially the same as in Sept. But I am not Paul and no expert on all this so don’t know what it means in terms of adjusting TSP allocations. Despite not much change in the indicators, as we all know there is lots of talk in the media that a bear market is now here or certainly looming to arrive anytime from early to late 2019, who is right…?

      1. You’re scaring me man about my future free time (I have one on the way).

        I remember you posting something about what you were setting up for the kiddo investment wise. Do you recall what post that was?

  25. I have been contributing/allocating 50% C and 50% I for a while, but I am currently at negative -3k ($0 gains and -3k from contributions) and the negative is increasing given the recent stock market results. Any advice? Should I leave it and hope it will recover or should I make changes to my allocation/contributions? Is even smart to make changes while being in a negative.

    1. -3k! I’m -17k but I was averaging 17 to 21 PIP a quarter so even though Im -4% PIP this quarter I’m still ahead. Just need to wait it out.

        1. Ok, you win! Well I got 11 more years to win it back with interest so I’m not sweating and you shouldn’t either especially for 3k.

    2. A few thoughts for the folks commenting about losses. Not throwing shade, this applies to myself (I have to remind myself of this monthly). Barely anyone can predict the market and make gains. You’re better off putting your $ in a fund vs using a stock broker. Not that this applies to a TSP per se (cannot use a broker), but essentially you can accept the fact that very few people (less than 2% I believe) can predict markets well. If TSP Paul was Warren Buffet he wouldn’t be working for the federal govt. Which by the way, I’ve opened up another account on Stash and my “roll with buffet” fund is doing well compared to other funds.

      Second, having a heavy reliance upon Paul’s monthly update isn’t healthy. He preaches about educating yourself (books posts, etc) and making your own decisions. At the end of the day, you have to make your own decisions. In the event he hasn’t posted, you can always run the methodology he does.

      1. I have accounts with Fidelity and Vanguard and, at the end of 2017, their analysts also recommended placing a lot of money in international funds which, in hindsight, seems overly optimistic after huge gains in 2017. Look at the 2-year chart of Vanguard VEA (I Fund in TSP) and looks like an upside down U or frown…crazy. The expectation that the market will just bounce back soon seems optimistic, and I remember the “lost decade” of 2000-2010 and flat C fund. Just thinking out loud and look forward to Paul’s next update. However, these days, not sure anyone can predict what will happen.

  26. I understand your strategy, but a bit challenging for me psychologically because I’m 2.5 years from labor force exit. I estimated my annual expenses in retirement and set aside 8 years of funds and put in granny G fund. The rest in C and I. This helps me sleep at night and thanks for your insights!

  27. That’s for all of the help thus far. I know its all up to us but just had a general question for everyone and TS Paul. Is it weird to try and play the fence if you will, and what I mean by that is Changing my Contribution to strategy but periodically moving gains over to the L 2050 or G Fund? Kind of like “protecting” the money that you made per quarter from you allocation changes. LOL I hope I’m making sense. I’m fairly young and just thinking of different ways to approach the TSP while learning at the same time. But wanted to know the pros and cons to this method. Thanks in advance.

  28. Any advise on those facing furlough or work without pay? At what point should we consider TSP loans to make ends meet? Its lousy timing to pull money out with the market on the up-side of a recent correction.

    1. A TSP loan/penalized withdrawal should only be done to avoid bankruptcy. None of us should be at that stage after only 1 paycheck. Prioritize spending on only the essentials during the shutdown. Credit cards, student loans, etc can go on the back burner. Food, utilities, rent/mortgage, car/gas come first and really should be all you spend money on until the govt opens back up. Pile up any remaining cash that would have gone to debt payments until the crises passes. I would only take a TSP loan out if I was unable to cover food and utilities for the month. You wont get thrown out for one missed rent check nor will your car be repo’d for one missed payment. All the above should get you until march/april.

      1. I second this. He is spot on. Sounds like he’s been listening to Dave Ramsey. Also, after this passes. I beg that we all have at least 3 to 6 months of expenses saved for another one of these crisis situations in the future. And try to remain debt free from everything except the house unless you can have that paid off quickly as well. I promise then you can look at these situations like a joke. Then remember the players and vote them out of office.

        1. I’ll 3rd it, especially if you lived through the 2013 furlough, that should have woken one up to saving a min of 3mos of emergency cash.

  29. Is this site going to be discontinued? It’s been almost 4 1/2 months since your last update and alot of things have been going on. I understand kids change everything but I miss reading the updates.

    1. The Fed Trader is still releasing updates if you want to see market summaries. Realize, though, that the website is following a different investment strategy than Paul’s. Pritchard has been 100% G fund since October 23rd.

      1. Wish I would have followed that advice in October….but hindsight is always 20/20.

        I’m putting all future allocations to the G fund. But concerned that I’ll lose a lot of $ if I transfer my I funds out. It’s the old risk. Do you take your losses now and get back in at a different market price, or do you just wait it out until it recovers…I have 20 years until I’m retired, so I can be patient.

        1. 20yrs, then in your case if it were me I’d let it ride as is (that is what I did in 2008 when I had 20yrs to go until retirement), that’s a whole lot of time to fully recover and then some. At most I’d monitor and if regain close what it was in Oct move maybe max 20% to G or L. But it’s your money so do what you think is best.

        2. Put your money back in the market. If it is there keep it there. Put all new contributions to the market. I don’t give a hoot if you use C S or I or C and S or C and I Even if you use an L2050 fund. I ran with a 50/40/10 C/S/I adjusted now and again but here I am retired. Bang. But my best and most point on advice. Put it all in C and let it run. C has averaged 9.5% since its inception. It is very diversified because it hold 500 of the best US stocks. It gets updated when the S&P gets updated with dropping an under performing stock to a better one. I have a friend who this year is going to retire with a bit over 1.2 mil in his account. He stayed in C since he started working with me in 1988. You cannot go wrong with proven results.
          Reply

        3. @KEENAN the best time to buy new stock is when prices are low. Changing future allocations to the G fund is missing out on serious gains with compound interest. With money already in the I fund wait it out, it will and is showing signs of recovery. But never put new money in a fund that wont make you any money.

  30. Put your money back in the market. If it is there keep it there. Put all new contributions to the market. I don’t give a hoot if you use C S or I or C and S or C and I. I ran with a 50/40/10 C/S/I adjusted now and again but here I am retired. Bang. But my best and most point on advice. Put it all in C and let it run. C have averaged 9.5% since its inception. It is very diversified because it hold 500 of the best US stocks. It gets updated when the S&P gets updated with dropping an under performing stock to a better on. I have a friend who this year is going to retire with a bit over 1.2 mil in his account. He stayed in C since he started working with me in 1988. You cannot go wrong with proven results.

    1. Re: Brad:

      Per the home page: Current Business Cycle Phase and TSP Allocation. This monthly update provides my current Thrift Savings Plan allocation and the reasoning behind that allocation strategy.

      So, as it is a monthly update it should be coming any day…

    2. I’ll just say that this post provides the links used to determine the current business phase. It’s very helpful and easy to use—a few clicks that take a few minutes and you’re done. Maybe I’m in the minority, but don’t feel a need for monthly updates.

      I’m sure TSPaul and family are extremely with the baby. Things will continue to be very time-consuming for some time based on my memories of when my kids were little. I remember when I first came across this very detailed site I assumed that the author did not have kids lol..

  31. @austin i agree…if you’re assuming that the prices are “low” . I think they are high and will be on their way down. If that is true, better off buying a fund that will not lose money and then transfer those funds when we are in a growth period.

    Lots of indicators that a recession is coming. Check out Fedtrader.

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