in the beginning .. what’s this about

This started with the question, “Can I make more money on my Thrift Savings Plan?”

The answer is yes – emphatically. The first attempt yielded a 10-year, 2005-2014 annual rate of 12% and the second attempt yielded 18%.

annual return comparison

Maybe a little history is needed – I have been a federal employee for 30+ years and been contributing to TSP for about that long.  My long term strategy has been to invest in stocks to maximize returns.  In the days before the S and I fund, I had 70 in C fund and the rest in F and G.  After S and I came into existence I had 80% in the C, S and I. This worked well through the years and the only adjustment was to re-allocate every year or so to keep the percentages in each fund matching what I intended.

I am an engineer by trade – logical and broadly educated to solve real world problems. So I used my dusty engineering/mathematical tools to tackle the answer to my question. I applied regression analysis to the previous G, F, C, S and I funds and adjusted the model/formulas to best predict next month’s fund value. I used some judgement to get the formula (the Basic). I eventually tried to improve it by adding economic factors (the Plus).

I will explain my methodology, testing and results with all too much detail in another article.

Historical month-by-month data

But, to be clear, the monthly allocation recommendations (the Basic and Plus) are all mathematical.  There is no part that relies on my judgement for the month-to-month allocations.

So, I will be posting TSP allocation recommendations to memorialize it as I prove, or disprove my allocation formulas.

There will be two recommendations TSPinvestor Basic, and TSPinvestor Plus. The TSPinvestor Basic is a nominal 12% return that relies on historical fund data. It will be released no later than the first of the month. The TSPinvestor Plus is a nominal 18% return that relies on historical fund and economic data and will be released after around the 9th of the month.

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