Roller coaster vs. merry-go-round TSP investors

If you have been a Thrift Savings Plan (TSP) investor for a time, you’re aware that the C, S, and I funds, connected to the US and international stock markets, increase in value. They go up and down. But mainly upwards, so far, at least.

People of diverse ages, backgrounds, education levels, and occupations comprise the TSP millionaire category. But they have something in common: they’ve spent an average of 29 years solely or heavily in stock indexing funds.

Abraham Grungold is one of them. Retired, he currently works as a full-time financial advisor with several TSP millionaires among his clients. 

We inquired about his experience on the TSP roller coaster. And this is what he said in response:

Question: If you’re a TSP participant, what type of investor are you? 

TSP investors fall into two categories. First, the thrill-seekers recognize that the stock market will experience ups and downs, twists and turns, and there is no way to know when they will occur. They have been contributing to their TSP for 25 to 30 years, ignoring market downturns. They don’t sell when the market is down; instead, they keep buying. Roller coaster riders are sure to become TSP millionaires.

Then there are the merry-go-round riders, who are TSP investors. They don’t like taking any risks or be stressed out in the market. They are the ones who have spent their entire government careers investing in the G Fund. The merry-go-round rider strategy is perfectly acceptable. However, they cannot aspire to accumulate a million dollars in their TSP account.

Question: When will there be a bull market or an upturn? 

Half of the experts predict no recovery, while the other half predict one in this year’s third or fourth quarter.

Even though the market has been trending downward this year, I see it as a purchasing opportunity. I continued to make purchases in both my TSP and my personal IRA, and I actively invested.

Question: When will the TSP hit its all-time high again? 

I don’t have a solution, but after businesses resume normal operations and the pandemic has passed, the markets will rise even faster than before. The conflict between Russia and Ukraine will undoubtedly affect world markets. The price of gas will hurt American consumers.

Last year, I received calls from clients concerned about their TSP, asking if the federal debt ceiling and the pandemic supply scarcity would lead their TSP to plummet even more. They are now worried about the conflict in Ukraine. There is no way to predict when the financial markets will turn around with a crystal ball.

As a roller coaster rider, weathering the market’s storms will result in a recovery, and you will end up better off than you were before the financial crisis.

Contact Information:
Email: tcarmack@hotmail.com
Phone: 6232511574

Bio:
Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and started working in financial services and insurance, helping families prepare for the high cost of college for their children. After spending years in the insurance industry, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his free time.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

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I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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