TSP 2023 Investment Changes?

[stygz]

I have been investing in our TSP's (spouse and I) with an 80% C (S&P 500 index)10% S (Dow Jones Index) and 10% I funds (MSCI fund). I have been considering making some changes. We are 100% stock/Index fund invested in our TSP. We hold maybe about 5% of our total assets in outside accounts in index bond type funds.

I am really wondering if I should incorporate a higher mix of the S fund and less I fund.

What are some of you doing in your TSP for 2023?

[matjung]

I don't have a TSP, so cannot help with the query.
But, where do you see value of combining S&P with Dow Jones?
The correlation between both indexe is pretty high.
Does your risk adjusted return on investment benefit from splitting your money?
If not I would go for S&P.

The MSCI fund probably allocates a lot of money into US stocks, too.
I would do a combination of (S&P with MSCI ex US) with Domestic and Global Bonds.

[stygz]

Quote:

Originally Posted by matjung I don't have a TSP, so cannot help with the query. But, where do you see value of combining S&P with Dow Jones? The correlation between both indexe is pretty high. Does your risk adjusted return on investment benefit from splitting your money? If not I would go for S&P. The MSCI fund probably allocates a lot of money into US stocks, too. I would do a combination of (S&P with MSCI ex US) with Domestic and Global Bonds.

According to the prospectus(s).

The I fund (MSCI EAFE type fund) does not contain anything from North America.

The S Fund is small to medium companies, broad index fund excluding S&P companies.



Basically from from I have seen from historical returns on the C (Large cap) and S (small and med. cap) funds is that when one has a bad year, the other seems to have more favorable results. Basically I have a total stock index fund with a tilt even more so to the S&P 500. The TSP does not offer a simple total index. In other words there is a VOO and VO but no VTSAX.

[Harris4crna]

I allocated my funds to the L-Income fund until Fed pivot. I am in preservation mode. If I was still investing into the account I would be more aggressive to capture lower price.

[VanWinkle]

A friend has a website that may provide some guidance for those invested in the TSP.
https://tspcounselor.com/

This may be a source for answers to some of the OP's questions.

VW

[SloHan]

My focus is long term growth and I wanted to mimic a total stock market fund in TSP like the ETF VTI. I read that you need to hold a market cap weighted ratio of 5 percent C fund to 1 percent S fund.

So my TSP is about 80% C fund and 20% S fund.

I don’t hold any I fund because it doesn’t include all countries and has underperformed because of that. Something like Vanguard VTIAX might be a better option for International.

[FLSUnFIRE]

Quote:

Originally Posted by stygz Basically from from I have seen from historical returns on the C (Large cap) and S (small and med. cap) funds is that when one has a bad year, the other seems to have more favorable results. Basically I have a total stock index fund with a tilt even more so to the S&P 500. The TSP does not offer a simple total index. In other words there is a VOO and VO but no VTSAX.

FWIW, my TSP has been equally weighted between C and S for 25 years (I'll rebalance if they diverge by 2-3% at the EOM when I pull my numbers) and have a little bit of international too. I consider this "total market" and very slightly reduces the influence of the megacaps, and in theory, weights me a bit more to the up and comers (higher risk/return). My taxable account is all VTSAX and my Roth is all VSMAX and are relatively equally weighted and have been for 25 years as well. Set and forget at the start and haven't tinkered much. I think I've slightly beaten the results I'd have had if I was all VTSAX and C fund but not by much (mostly recalling EOY performance at various points). To calculate my true IRR is too much work with 25 years of transactions that I'd have to enter.