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Author: jesserivera67 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75642  
Subject: Re: Need Advice on a Thrift Savings Plan Date: 12/7/2004 1:17 AM
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Hey Chris!

Starting a TSP eh? Congratulations! This is a big step in preparing for your future. I took a quick look at www.tsp.gov which seems to have quite a bit of information.

I know the S&P is up 34% this year, but hasn't it been negative growth for the last three years?

Not quite. The S&P is up about 8.8% this year. I'm not sure where you got the 34% number. You may have been looking at 2003 perhaps? It hasn't been negative for the last three years. Actually it's close to 3.5% up. During the bear market it took a serious beating (who didn't?) and between 2000 and 2002 was down I think close to 50%!

Many funds do well during low interest, both bonds and stocks. Bonds in particular if rates continue to go down but that's definitely not the case now. They're actually moving up.

I need to pick the investment package that will see the highest return for the next three years, likely the last few years I will have a chance to use this.

Then the funds you've chosen are not the one to go with. You need some short term investments. 3 years is just not long enough to invest in stocks funds. Most people consider 5 years an absolute minimum and prefer 7-10 years for stock funds.

If you need the funds in 3 years then I believe you're only option is most likely the G fund I think. I understand you want the highest interest rate but you don't have the time and if the market tanks for whatever reason you're going to be left with zippo at the end of three years.

Hopefully there are some others that know TSP a bit better. Not sure of your age, goals, tolerance for risk etc. so it makes it tough to make any real suggestions but if you need that money in three years I wouldn't recommend you jump into stock funds right now.

Why three years? That money is for your retirement. Are you planning on retiring in three years? Will you have enough? Some questions you may want to ask.

HTH.
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