Six Ways to Beat the Bear Market with Your TSP

For many Thrift Savings Plan investors, these are certainly interesting—for some stressful—times. And the news this week was grim (not to mention grime) indeed.

On June 1 most major financial news outlets (from the cable TV screamers to the less excitable print pundits) said essentially the same thing:

You, dear sucker, are toast!!!

Typical headline: BEAR MARKET—WORST MAY IN 70 YEARS.

(Generally speaking Bull markets mean things are going up and Bear markets mean things are going down.)

Turns out that people like me, who thought they were having a good time in the merry month of May (despite the still unexplained stock market ‘flash crash’) were really getting hosed.

Armed with this info—that things are a lot worse than most of us thought—the question is what to do?

Question: Should you:

  1. Buy stocks via the C, S and I funds of your TSP while share prices are low/good. Maybe.
  2. Get out of the C, S and I stock index funds while the getting is good. Maybe.
  3. Do nothing, at which many of us excel.
  4. Pretend you are 71 years old so the news is not so bleak.
  5. Wind your watch (it’s an old joke) or…
  6. Go to Plan B (to be announced)

And the correct answer is:


One of those strategies is almost certain to be correct. In fact, I guarantee it. Just not which one. Which is a problem.

In his CBS column on June 1, financial planner Allan Roth notes that the media loves sensationalism and that the 7.9 percent decline in the Dow-Jones Industrial average in May is true. But…

“In reality,” Roth writes, “this decline is only the highest in the last 15 months. And this wasn’t just any 15 months, it was a period boasting a lightening fast bull market, the fastest bull since the great depression, where markets rose 80 percent.”

He points out that there were equally depressing financial headlines in March of 2009 “just as the great bull (market) began.”

So what to do? Most financial planners recommended that people investing for retirement, like long-term investors in the TSP, set a course, have a plan and stick with it. Some say the TSP’s self-adjusting Lifecycle Funds (with your stock, bond G-fund mix based on the year you plan to start tapping your TSP fund) work nicely. Currently 694,763 (out of 3.2 million) TSP investors have some money in the Lifecycle funds. Four to five percent of all TSP investors have all their money in the L-2010, 2020, 2030 or 2040 funds.

After the recent ride on the market roller coaster the number of L-fund participants may increase.

Meantime, if you’ve got any thoughts, tips or comments on getting rich (or at least not going broke) in the TSP, pass them along to me at:

Paying Off National Debt

In a recent column, a reader proposed that feds help pay off our staggering, ever-growing national debt via the Combined Federal Campaign. Lots of response and we will publish some of them next week. Here’s one with what seems like a win-win outcome:

* “Mike – I’ll be glad to give 10% of my salary to help Uncle Sam with the National Debt. Here’s what has to be done:

1) give me a 15% raise. 2) I will freely contribute 10% for debt reduction.

Simple, isn’t it? ” — D.S.

I’m in!!!

To reach me:

Nearly Useless Factoid
by Suzanne Kubota

Mummies of the World, is about to take to the road, and in so doing, will become “the largest traveling exhibition of mummies ever assembled.” Let the puns begin.

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If you hate your annual performance review, don’t worry. You’re not alone. Some employees dread that yearly meeting with their boss, where intangible topics, such as ‘future goals’ are often discussed. And we’ve heard tales that bosses don’t like them much, either. But the performance review doesn’t have to be a chore . . . or torturous. They can actually be productive conversations that not only benefit the office, but the organization as a whole. Sharon Armstrong is author of the Essential Performance Review Handbook, and has served as director of human resources at several organizations in the D.C. metro area. Read more of her advice here.

Bill would give DHS emergency cyber powers
DHS may soon have the power to take over civilian networks’ security, if there’s an “imminent cyber threat.” Read more here.

Dorobek Must Reads – June 3
Worried you’ll have no idea what people are talking about around the watercooler this morning? Each day, the DorobekInsider team collects a group of stories that we’re reading to stay in the know. On Thursday: James Cameron brainstorms about the oil spill in the Gulf and, for the Defense industry, it’s the best of times and the worst of times. Read more here.

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