Shows & Panels
- The 2014 Big Picture on Cyber Security
- AFCEA Answers
- Ask the CIO
- Building the Hybrid Cloud
- Connected Government: How to Build and Procure Network Services for the Future
- Continuing Diagnostics and Mitigation: Discussion of Progress and Next Steps
- Federal Executive Forum
- Federal Tech Talk
- The Future of Government Data Centers
- The Future of IT: How CIOs Can Enable the Service-Oriented Enterprise
- The Intersection: Where Technology Meets Transformation
- Maximizing ROI Through Data Center Consolidation
- Mitigating Insider Threats in Virtual & Cloud Environments
- Modern Mission Critical Series
- Moving to the Cloud. What's the best approach for me
- Navigating Tough Choices in Government Cloud Computing
- The New Generation of Database
- Satellite Communications: Acquiring SATCOM in Tight Times
- Targeting Advanced Threats: Proven Methods from Detection through Remediation
- Transformative Technology: Desktop Virtualization in Government
- The Truth About IT Opex and Software Defined Networking
- Value of Health IT
- Air Traffic Management Transformation Report
- Cloud First Report
- General Dynamics IT Enterprise Center
- Gov Cloud Minute
- Government in Technology Series
- Homeland Security Cybersecurity Market Report
- National Cybersecurity Awareness Month
- Technology Insights
- The Cyber Security Report
- The Next Generation Cyber Security Experts
Shows & Panels
The Good Old Days: 2007
Friday - 11/14/2008, 4:00am EST
From August to September, 2007, investors pumped just over $6 billion into the TSP, most of it going to the C, S and I funds which are indexed to track the performance of the U.S. and international stock markets. People were buying into those funds, at what turned out to be their peak high prices, in droves.
Many financial planners call that "chasing returns," a practice they frown upon, but one that it is difficult for use mere mortals to avoid doing.
In September, 2007 the C-fund which tracks the nation's 500 largest publicly traded companies returned 3.76 percent. That's just for one month.
The S-fund returned 2.97 percent. It tracks most of the rest of the U.S. stock market (about 4,500 stocks) that are both large and small caps.
The international stock-index I fund was everybody's darling. It returned 5.36 percent for the month of September. That was then, of course, and this is now...
Now many investors consider themselves lucky if their portfolios have lost "only" 5.36 percent.
In fact this year, many investors are doing just the opposite of what they did last year. They are bailing out of the C, S and I funds and putting (what's left of) their investments into the super-safe Treasury securities G-fund. Many plan to return to the market when it goes up.
And the point is?
Markets go up and markets go down. Most pros recommend that long-term investors (which is most folks in a 401(k) plan) diversify their portfolios (with a balance of stocks, bonds and treasury securities), and rebalance it a couple of times a year. Most, especially fee-based pros who don't sell stocks or get commissions, recommend that clients buy low (when the market is down) rather than fleeing from it.
Warren Buffett, whose name is always followed or preceded by "legendary investor", is doing that right now. If advocates of the "bottom-feeder" investing approach are correct, and if the market goes back up, people right now who are investing via payroll deduction into the C, S and I fund are picking up bargains. The operative word, as always, is IF.
Almost all the pros say that jumping in and out of the market almost guarantees the investor will miss those best days, usually there are only a few each year, and that will cut into their overall long term returns. Big time.
For an example of how missing those so-called "best days" can drain your TSP account, click here.
For comparison purposes, here's another "best days" timeline/chart: click here
Nearly Useless Factoid
Here we are, smack dab in the middle of Peanut Butter Lovers Month, and from the Mental Floss quiz, we learn Jimmy Carter was the second U.S. president who worked as a peanut farmer before (and after) taking office. You can find out who the first was by taking the quiz.
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