Here you can find our average Rate of Return and Sharpe Ratio. Please note that these are our own personal performance indicators and are no guarantee of future performance.
Our Rates of Return & Sharpe Ratio
For Grow My TSP
Rate of Return and Sharpe Ratio give insight into how risky an investment strategy is compared to its potential return. We at Grow My TSP want to minimize downside risk while maximizing our returns when the overall market is trending up.
Average Rate Of Return
Last 2 Years
This is not the PIP. This is the actual average rate of return for the previous 24 months in our TSP account (as of April 2022). We use rate of return because that’s what the traditional financial services industry uses as an investment performance indicator.
Last 5 Years
The Sharpe Ratio helps us determine our risk adjusted return. The best portfolio is not necessarily the portfolio with the highest return. The best portfolio would have a high rate of return and low risk. A Sharpe Ratio above 1.0 is considered to be low risk relative to the return of the portfolio.
Personal Investment Performance (PIP)
The PIP for each individual TSP investor is calculated using the Modified Dietz Method. It is a snapshot of your personal investment performance. It is not designed to be compared to another investor’s PIP. Rate of return (ROR) is a much better comparison tool.
We recommend calculating your own Sharpe Ratio to better understand how much risk is associated with YOUR PIP and YOUR ACTUAL rate of return. Investors should strive for the highest PIP/ROR and the highest Sharpe Ratio.
As always, this is not a recommendation or financial advice. We are sharing what we are doing in our own personal TSP account for informational and educational purposes.
Feel free to follow, disregard, or make adjustments based on your personal risk tolerance. Some may choose to be more aggressive, or more conservative, based on their personal situation. The performance indicators listed are no guarantee of future performance.
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