Most investors in the federal Thrift Savings Plan wouldn't touch the international stock index I fund with a 10-foot pole. It has been a poor performer for nine...
Suddenly — almost out of nowhere — the international stock indexed I fund is the hottest property in the Thrift Savings Plans investment lineup. Long avoided by most investors, the I fund was the best performer in 2017. A share you bought for $10.29 in March, 2009 is currently worth almost $31. And the price is going up. The I fund outperformed all others in the TSP returning 25.40 percent last year.
So is the suddenly robust international market the wave of the future or the bitcoin of investment options?
Given its swift, surprising rise, are you patting yourself on the back for having some I fund shares in your retirement nest egg portfolio, or are you mentally kicking yourself for missing the I fund boat?
So what happened? And is it too late to get in?
There are two routes to becoming a Thrift Savings Plan millionaire.
Your lifetime investment strategy depends in large part on your long-term goals and your short-term risk tolerance. When stock funds plunge, do you sell and move to a “safer” option —like the G fund — until they recover. How long until you return to the market? Or do you hold what you’ve got and continue to buy when the stock market is heading south?
Would you invest in a fund that, over the last 10 years, had an average return of 4.07 percent?Including three years when it made only 2.10 percent and 1.02 percent and one year when it was down 1.27 percent? That’s a tricky question, but not a trick question. Because the fund in question — the high-risk/ high-reward I fund did just that. Despite years of poor performance, the I fund came out the winner when it returned an average of 25.42 percent. Imagine if you had bought I fund shares over the past 10 years? Where would your portfolio be today?
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Source: Wikipedia
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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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