If it feels good, it must be bad. However if you ignore it, you may be on the right track, Senior Correspondent Mike Causey says. So are we talking about your TSP...
If you think about it all the time, if it’s an emotional high sometimes, you may have a problem.
If on the other hand…
If it’s deadly dull, and it’s been months since you’ve even thought about it, there’s a good chance you are on the right track.
We refer, of course, to investing for retirement. Any resemblance to your romantic life is purely coincidental.
Many professional financial planners (unless they sell mutual funds or charge management or transfer fees) suggest that people pick a strategy and stick with it. They say if you get emotional about something like your Thrift Savings Plan, you may be making a big mistake.
Several that I’ve talked with, including Vanguard founder John Bogle and CBS MoneyWatch columnist Allan Roth, say you should make a plan and stick with it, regardless of market highs and lows. Both say they would love to get into the federal TSP. “Make me a dollar-a-year federal worker and I’m in the TSP,” says Roth.
What both counsel is that investing should be dull, not exciting. “If you get excited and are having fun [investing], you are probably doing the wrong thing,” says Roth. He noted that before and during the shutdown, a lot of TSP investors bailed out of the stock-indexed C, S and I funds and moved into the super-safe Treasury securities G Fund. The problem with that is that the markets didn’t tank — in fact they reached record high levels this week — so people would have “made” money had they stayed put.
Roth was our guest yesterday on our Your Turn radio show. He was talking about the people who left the TSP’s stock-index funds (to the tune of $2 billion dollars) during the shutdown. They anticipated that the markets would go crazy and they wanted the safety of the treasury securities G-fund. As it turned out the markets soared.
Here’s some of the reaction from readers who tried it both ways. They were reacting to yesterday’s column.
Frank in D.C. Says:
NEARLY USELESS FACTOID
Compiled by Jack Moore
Apologizing for things outside your control — known as a superfluous apology — makes you more trustworthy, according to research from the Harvard Business School. In the study, when a man approached strangers at a train station on a rainy day and said, “I’m so sorry about the rain! Can I borrow your phone?” he was 38 percent more successful in using the strangers’ phone than if he only asked to borrow the phone.
(Source: Harvard Business Review)
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Mike Causey is senior correspondent for Federal News Network and writes his daily Federal Report column on federal employees’ pay, benefits and retirement.
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