NigelSt.Hubbins
New member
Avoiding TSP calamity given debt ceiling impasse -- I'm now "all out" of the market
Well, as a recent retiree who hopes not to tap my TSP for at least the next five years, I have reallocated from a position of approximately 90% stock funds, 5% F fund and 5% G fund to 100% G fund. While the budget/deficit heat seems to have cooled a bit over the last week or so, it's hard to see much upside in taking the risk of staying in stocks or bonds -- at least in the context of the easy and free movement among the various fund categories in the TSP -- when there appears some potential to lose mightily and not much incentive to stay in until the debt ceiling issue is resolved. Or, at least until the can is kicked by Congress down the road in a fashion that won't have people staying awake at night. (On the non-TSP side, I have sold off some stocks that were ripe, but am not doing a wholesale redistribution. On the other hand, I won't be eating cat food if those investments don't go quite as I would like.)
I'm a little surprised that not that many people seem nearly as nervous as I, but even assuming the debt ceiling issue does not result in default, it is hard for me to envision that the "game of chicken" will not create some significant turbulence in the market. And it's a little hard to believe that I'll be missing a great opportunity for a market run-up in the next month or two. Further, if it turns out that there is a major dip, it might provide a good buying opportunity and the chance for me to de-leverage some from stocks without unduly sacrificing growth opportunities.
I guess we'll see!
Well, as a recent retiree who hopes not to tap my TSP for at least the next five years, I have reallocated from a position of approximately 90% stock funds, 5% F fund and 5% G fund to 100% G fund. While the budget/deficit heat seems to have cooled a bit over the last week or so, it's hard to see much upside in taking the risk of staying in stocks or bonds -- at least in the context of the easy and free movement among the various fund categories in the TSP -- when there appears some potential to lose mightily and not much incentive to stay in until the debt ceiling issue is resolved. Or, at least until the can is kicked by Congress down the road in a fashion that won't have people staying awake at night. (On the non-TSP side, I have sold off some stocks that were ripe, but am not doing a wholesale redistribution. On the other hand, I won't be eating cat food if those investments don't go quite as I would like.)
I'm a little surprised that not that many people seem nearly as nervous as I, but even assuming the debt ceiling issue does not result in default, it is hard for me to envision that the "game of chicken" will not create some significant turbulence in the market. And it's a little hard to believe that I'll be missing a great opportunity for a market run-up in the next month or two. Further, if it turns out that there is a major dip, it might provide a good buying opportunity and the chance for me to de-leverage some from stocks without unduly sacrificing growth opportunities.
I guess we'll see!
)
) It is a great feature of the TSP that one can move assets around so quickly and without fees or tax consequences. Of course, most potential market crashes don't have the courtesy to provide the dates on which they will likely occur. The tricky part now will be to figure out when (if??) and how to come back into the market. I will probably eventually attempt to construct some sort of laddering/averaging approach, but I'm certainly not expecting a rally anytime soon.
