TSP warns enrollees not to panic over ‘Brexit’

The Thrift Savings Plan is urging investors to “avoid chasing returns” and think twice before making any impulsive decisions on stock funds, following Britain’s vote to leave the European Union and subsequent  drop in the market.

In an online post to investors, TSP said enrollees will have the best results “if you stick to your plan.”

“Don’t get sidelined by distractions. Make adjustments to your strategy only after careful consideration,” the message stated. “Remember, your investment performance is determined, in large part, by your asset allocation, not by guessing which market sector is going to be in favor at a particular time.”

The Associated Press reported that the pound dropped to its lowest level since 1985. U.S. stocks fared better than the markets in Europe and Asia, but the Dow Jones industrial average was down 378 points, or 2.1 percent, to 17,631 as of 10:55 a.m. It was down as much as 538 points earlier in the day, the AP reported.

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Kim Weaver, director of external affairs at the Federal Retirement Thrift Investment Board, said TSP has posted similar notices in the past when the market drops.

“It is a reminder that investing for retirement is a long-term investment,” Weaver said in an email to Federal News Radio. “The U.K.’s exit has no direct effect on TSP investors other than the vote’s impact on U.S. and international financial markets. What that impact is beyond today, I couldn’t predict.”

TSP said in its post that while it’s a good idea to review one’s portfolio, don’t let short-term market movements impact your plans.

“An investment strategy of chasing returns or trying to ‘time the market’ means you have to be consistently correct two times: exactly when to get out of a particular asset class and exactly when to get back in,” TSP said. “Most investment experts agree that such success is highly unlikely over long periods.”

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