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Shows & Panels
TSP investments -- everything's gold ... except gold!
Wednesday - 1/8/2014, 2:00am EST
Many investors who pulled money out of the stock funds at the bottom of the recession for the "safety" of the G Fund came back to the stock market last year as they saw the stock-indexed funds rising dramatically. Currently about 39 percent of the TSP is now in the G Fund.
The C Fund (S&P 500) returned a whopping 32.45 percent, the S Fund (small-cap stocks) was up 38.35 percent and the I Fund (international stocks) rose 22.13 percent. This despite early 2013 warnings of a Euro Zone collapse as Greece, Spain, Portugal and Ireland were having major financial problems.
This time last year, many "experts" predicted investors would be lucky to get 7 or 8 percent returns.
Investments in gold, which had been, well, golden for several years, suddenly tanked. Its dramatic fall was a surprise to the handful of TSP investors (and companies that sell gold) that have pushed for a gold or precious metals fund in the federal 401(k) plan for years. The TSP argument is that the C and S funds offer some investment in precious metals without overdoing it. So far, so good.
Financial planner Arthur Stein says the experts — who predicted a modest year in the stock market — were wrong for several reasons:
- Third-quarter growth was an above-average 4.1 percent
(annualized) and consumer confidence increased.
- Stein says the job market strengthened even though payrolls are
below the January 2008 peak and unemployment is still high. He notes that
household debt fell and the savings rate increased and that household net worth
finally exceeded the 2007 level.
- Equally important is the fact that inflation remains low (the January 2014 Social Security COLA was 1.5 percent) and interest rates also remain low.
Today at 10 a.m. Art Stein will join us on our Your Turn radio show.
Also joining us for a look at what's ahead for workers and retirees will be Federal Times writers Andy Medici and Nicole Blake Johnson. They'll talk about what did and didn't happen to feds and retirees in 2013 and what may happen to them this year.
NEARLY USELESS FACTOID
Compiled by Jack Moore
Smut Eye, Lick Skillet and Boar Tush are all towns in Alabama.
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