The TSP funds have not changed, my strategy of avoiding significant losses has not changed but the investing environment has and so must your allocations if your retirement nest egg is to survive. Denial is in the air. Don’t follow the herd.
This is my third update since late 2019. I did not expect to have to update it often since the guide was simply about why the funds perform the way they did in the past and how they should continue to perform in the future. Then the future changed.
The changing investment environment brings out some fund’s issues that we need to consider today. The guide also covers TSP Allocation Strategies along with a discussion on the new environment.
The new environment includes:
- The financial crisis began before the coronavirus as observed in the Repo Market (Banker’s overnight Bank) in late 2018 and late 2019.
- The coronavirus is causing an near-instant economic Depression but we have seen little demand-side policy support so far.
- The economic depression (base case) will accelerate the financial crisis and lead to a negative feedback loop (financial-economic).
My view on our behind-the-curve leaders in government is they are like doctors treating cuts on the leg and arms when the patient has had a heart attack and the heart is not pumping blood through the system. If they do not keep the economy’s life blood flowing through the economy, nothing else matters.
The life blood of the economy is the lost wages of 30% of the population from lost jobs and reduced pay for many others. If Americans can not pay for essentials, rent, mortgages the economy dies. In other words, the global credit bubble just slammed into the global shutdown so yes, the environment has changed and we need to adjust.
Even if you are one of the 50,000 who has already read it, please take a look at the updated free TSP Allocation Guide when you get a chance.
Or you can listen to the “professional forecasters”…
TSP & Vanguard Smart Investor serves serious and reluctant investors