Adjust Your TSP Allocation during a Market Decline

Let me tell you how you should change your TSP allocation during a down market like now. Human nature makes us want to change something when we anticipate losses. The stock markets been down, the real estate market craze appears to be over. Shouldn’t we shift our money into something safe until the market starts going up again? Hang out in the G fund? Hell no. This is the biggest mistake I see people make and I see it all the time. During times where you expect a down market, don’t change anything. Pick a good strategy, like investing in the C fund, which is the S&P 500 index, and then stick with it for the long term. Those that pulled their money out during the COVID scare, and those that pulled it out after trump was elected both ended up losing lots of money. the markets rose when many expected them to fall. full disclosure, I’m not making a political endorsement of trump. He’s a fool, but the stock market doesn’t care....(read more)

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Change Your TSP Allocation in a Downturn In times of economic downturn, it is crucial to take proactive steps to protect your investments and ensure a secure financial future. One effective strategy to mitigate losses is to change your Thrift Savings Plan (TSP) allocation. The TSP is a retirement savings plan available for federal government employees and members of the uniformed services. It provides a variety of investment options that allow you to diversify your portfolio and maximize your potential returns. When the market experiences a downturn, it is common for stock prices to decline and investors to panic. However, making impulsive decisions based on fear can often lead to further losses. Instead, it is advisable to review and adjust your TSP allocation to minimize the potential impact of the economic downturn. Here are a few steps to consider when changing your TSP allocation during a downturn: 1. Evaluate your risk tolerance: Assess your ability to tolerate market fluctuations and determine the level of risk you are comfortable with. This will help you decide whether you should move your investments from riskier options, such as stocks, to more stable options, such as bonds or the G Fund. 2. Review your asset allocation: Take a closer look at your current TSP allocation. Ensure that you have a well-diversified portfolio that is aligned with your long-term financial goals. Diversification can provide stability during market downturns by spreading your investments across various asset classes, such as stocks, bonds, and international funds. 3. Consider the lifecycle funds: If you are unsure about adjusting your allocation yourself, consider investing in the TSP's lifecycle funds. These funds automatically adjust your allocation based on your target retirement date. They become progressively more conservative as you approach retirement, reducing the impact of market downturns. 4. Rebalance your portfolio: Periodically rebalance your TSP allocation to maintain the desired asset mix. Market downturns often result in certain investments performing better than others, causing your portfolio to deviate from your original allocation. Rebalancing ensures that you buy low and sell high, preventing your portfolio from becoming too heavily tilted towards underperforming assets. 5. Seek professional advice: If you are uncertain about making changes to your TSP allocation, it is always wise to consult a financial advisor. They can provide personalized guidance based on your individual circumstances and help you make informed decisions during an economic downturn. Remember, the key to successfully navigating a downturn is to remain calm and make rational decisions. While it may be tempting to panic and sell all your investments, it is important to take a long-term perspective and trust in the resilience of the market. By adjusting your TSP allocation thoughtfully and monitoring your investments, you can position yourself for financial success even in challenging times. https://inflationprotection.org/adjust-your-tsp-allocation-during-a-market-decline/?feed_id=116551&_unique_id=64ae5725d9555 #Inflation #Retirement #GoldIRA #Wealth #Investing #FERS #Landlord #military #passiveincome #personalfinance #richonmoney #tenant #thriftsavingsplan #tsp #veteran #ThriftSavingsPlan #FERS #Landlord #military #passiveincome #personalfinance #richonmoney #tenant #thriftsavingsplan #tsp #veteran