The G fund generally gets a bad rap.  While the rate of return is only about 2.5% per YEAR right now, it’s a whole lot better than losing money…  So when does it make sense to move to the G fund?  There could be lots of reasons.  Maybe you’re going on vacation and you don’t want to stress over market volatility.  Maybe you’re getting ready to retire within the next 6 months and want some stability.  Or maybe, the market looks like it’s going to tank and you don’t want to risk you nest egg…

The picture below is the “ideal” time to sell a stock short; trying to make money when the price goes down.  We can’t sell short in TSP but, what we can do is reallocate from the stock funds to the G fund when the market tells us that it’s getting ready to fall.  This picture is taken from page 41 of “How To Make Money Selling Stocks Short”, by William O’Neil, founder of Investor’s Business Daily newspaper.  

 

The next picture is a 6 month daily chart of the C fund.  It’s not an exact duplicate of the “ideal” above but, it’s awful close…

With Monday’s gap down thru the 50 Day Moving Average and today’s reversal day, now MIGHT be the ideal time to make a move to the G fund.  There are no guarantees in this business but, as long as the C fund stays below the 50 Day Moving Average, the risk of a significant drop remains very high.  A word to the wise…

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I have a TSP account just like you and I’ve been actively managing it for over 20 years.  If you want to know my current allocations and when I make a move, hit the link below and sign up.  Your retired self will thank you!

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