How SAFE is the G Fund?

[nnuut]

Looks like I lost % money (shares) in the "G" Fund?
Can anyone expain this? Probably due to rounding, but I never saw my "G" drop before?
View attachment 5536
View attachment 5537
View attachment 5538

 

[Gumby]

Nnut,

It is because your c & S funds gained in value on 1/26/09 and your G fund didn't gain much which made the G fund percentage go down.

 

[nnuut]

Nnut,

It is because your c & S funds gained in value on 1/26/09 and your G fund didn't gain much which made the G fund percentage go down.

Oh yeah, it's listing what % I have in the "G", "S" and "C" I gained more in the "C" and "S" !! DUH!!:embarrest: Too many meetings today!!!:blink:

 

[Prozium]

Found this story extremely interesting:
Britain is facing return of three-day week

http://www.independent.co.uk/news/uk/politics/britain-is-facing-return-of-threeday-week-1515307.html

Tens of thousands of businesses are already planning to scale back working hours this year in an effort to stay afloat.

 

[Steadygain]

I have no idea how Brit banks are structured as far as connectivity between investment banking arms (shadow banking) vs. traditional deposit-lending arms. (conservative) Glass-Steagall was repealled here which removed that firewall established during the GD for banks here.

The shadow banking system is the reason why we are currently in a recession and why this recession is so huge.

Glass-Steagall and the restrictions it imposed on the Traditional or Conservative Banks was done away with in 1999.

It's important to realize that Tradional Banks are forced to operate under the light of day - they are highly regulated; they must maintain a high degree of capital; they are insured and covered by the FED; they are barred against high risk operations.

The Shadow Banking system - has no restrictions, is allowed to operate with minimal capital, and takes the highest risks possible. This system rapidly grew during the Housing Boom and are ultimately what brought the whole mess into being.

After Glass-Steagall was lifted in 1999 - Traditional Banks were now allowed to practice shadow banking operations WHICH WAS DEFINATELY A STEP IN THE WRONG DIRECTION. However - they remained highly regulated banks and their off shoot shadow banking during the housing boom resulted in a very small part of the resulting disaster.

The Shadow Banks - had already been large - and this is when the Financial System developed a monumental shift - because they expanded so rapidly and became so huge they essentially took control. It was the Head of the New York Federal Reserve who brought this to light (and although he recently got a lot of bad press for not paying part of his taxes in a timely manner - he did get appointed and is now in place).

The bottom line is - if any institution or entity operates like 'a bank' then they NOW NEED TO BE REGULATED as traditional banks. Traditional banks NO LONGER do shadow banking operations. If we expect the government to work for the betterment of the nation - then we need warmly and openly welcome them to take control of the entire banking system and bring it under control.

 

[dpmp]

The unelected officials run the government and THEY ARE the major part of the shadow banking system.

Shadow banking system is here to stay. You can leave if you want, but they will stay.

 

[Steadygain]

The unelected officials run the government and THEY ARE the major part of the shadow banking system.

Shadow banking system is here to stay. You can leave if you want, but they will stay.

Very True

They are somewhat 'elected' amongst themselves - a tight knit group that sticks together and has their own in place at the highest possible levels. They alone have the power to manipulate the Markets and Currencies and any particular aspect (such as 'silver').

They pay the big money to the politicians and fully guarantee the high level goverment and admisitrative 'Financial Big Wigs' are part of their group. There is absolutely no way around it and no way to avoid it. Exposing this on any significant level will absolutely and undeniably guanantee you'll wind up in prison with no chance of ever getting out.

 

[Boghie]

Steady et. al.,

I, for one, will not be in the 'G Fund' when the Treasury comes a-knocking for a short term loan to survive on till the CongressCritters vote themselves another credit limit hike.

That short term loan may last a long, long time...

Anyway, why the comment that 'if the G Fund fails than the whole world collapses'.

Well, not really. Today, we just found out that the statement 'What's good for GM is good for Amerca' turned out to be false. Today, who cares about GM. Even the Gubmint blow heading their way is loose change rounding error on the Obama plastic.

Is it guaranteed that the international market (I Fund) and even the American market (C/S) would be long term damaged when the Chinese and the Boomin' Oldsters stop buying Treasury Bonds? Great Depression I hit the private sector, I tend to think that Great Depression II will hit the public sector harder than the private.

 

[abu binat]

my head is spinning -- first and likeily to be the last post...
is not the G fund just a 1/2 step away from putting money in a jar on the back porch?

 

[Boghie]

my head is spinning -- first and likeily to be the last post...
is not the G fund just a 1/2 step away from putting money in a jar on the back porch?

It earns you a bit over inflation. Right now the 'G Fund' returns 3.25%.
Money market funds are returning 0.50%
Treasuries are 1.5%

We are deflating at about 2.0%.
So, the 'G Fund' is returning an inflation adjusted 5.25%.

So, yes the 'G Fund' is for trust funders and retirees. You can consider it cash holdings. I, personnally, use it as a predator - trying to sell some equities high and then buy on a dip.

Regardless, when the 'C Fund' takes a 37% dump in 2008 the 'G Funds' +3.75% growth is +40.75% better than the S&P.

That is a Great Return!!!

 

[Zender67]

Issues: Dollar printing presses running non-stop. Treasueries becoming more difficult to sell. Other countries backing away from the dollar and us debt. Thin trading volume during "Santa Rally". Alleged insider stock selling way above "purchases". Mutual funds fully invested. Market awaiting private investor to buy stocks....

Is G fund a safe investment, one that will keep pace with, or beat inflation, especially with the "treasurery direct" or "special" relationship?

Thanks.

 

[James48843]

Issues: Dollar printing presses running non-stop. Treasueries becoming more difficult to sell. Other countries backing away from the dollar and us debt. Thin trading volume during "Santa Rally". Alleged insider stock selling way above "purchases". Mutual funds fully invested. Market awaiting private investor to buy stocks....

Is G fund a safe investment, one that will keep pace with, or beat inflation, especially with the "treasurery direct" or "special" relationship?

Thanks.

If we could be confident of that, I think we'd all be rich.
No one knows for sure.

IF inflation begins to run hog-wild, then no, G fund dollars will shrink, and inflation will eat you up.

But if inflation does NOT take hold, then G fund will do what it's allways done- eek out a little bit each day.

YOU have to decide what YOU want to do with YOUR money. We can't make decisions for you.

Good luck.

 

[Zender67]

Thanks James 48843.

Is this the language from the G fund sheet that would cause the lost value with hyperinflation...

The interest rate resets monthly and is based on the weighted average yield of all outstanding Treasury notes and bonds with 4 or more years to maturity.
​

Indeed recognizing I must pick my fund selections, not a one looks good right now... Your take?​

 

[Warrenlm]

"Is G fund a safe investment, one that will keep pace with, or beat inflation, especially with the "treasurery direct" or "special" relationship?"

I believe the answer to this Q, after the first comma, is a flat "no". Safe as FDIC insured bank accounts, sure, but real inflation, coupled with the ordinary income tax to be applied, guarantees that the value will diminish with regard to today's value.

 

[James48843]

Thanks James 48843.

Is this the language from the G fund sheet that would cause the lost value with hyperinflation...

The interest rate resets monthly and is based on the weighted average yield of all outstanding Treasury notes and bonds with 4 or more years to maturity.
​

Indeed recognizing I must pick my fund selections, not a one looks good right now... Your take?​

Welcome to the message board.

Here is the best advice I can give someone just starting out-- don't move too quick--not until you are comfortable knowing the risks and rewards-

Please read this thread first- it contains some good information:

http://www.tsptalk.com/mb/showthread.php?t=3629

I recommend that thread to anyone just starting out. Read it all the way to the end. It will take you a little while, but it contains good information on where to start.

None of us here are professional money managers- so it would be wrong for one of us to try and give someone else advice to move YOUR money to the C, the S, the I or the F fund.-

In fact, you'd need to be a licensed financial planner to do that- We're not, so we won't. We're all just feds, like you.

YOU will have to be the one that best determines where YOU should place YOUR money.

Thanks- welcome, and good luck.

 

[Zender67]

Thanks Warren and James.

 

[tsptalk]

The G fund will attempt to keep up with inflation as it will track those bond rates. Back in the late 80's to mid-90's we saw G fund retruns between 7% and 9%, believe it or not, compared to today's rate of under 3%.

That's why if the Fed starts raising rates, and investors are able to get guaranteed rates near 5%, 6% or more in the not so distant future, the stock market will be more vulnerable. High rates are not good for profits.

Welcome, by the way, Zender!

 

[Zender67]

Thanks TSPTalk...appreciate it

 

[Boghie]

Think of the G Fund as a cash holding...

You will NOT be able to retire if you invest in the G Fund through your working career. You will not be investing, you will be saving. At best, it will barely clear inflation. Those 7% and 9% returns Tom mentioned were in periods of high inflation - thus a real rate of return of about 1%.

Also, the Feds can raid the G Fund if they are unable to increase the debt ceiling. They have done so a few times in the recent past. They have always paid it back with the proper interest. But, they may be able to raid the fund if they are unable to issue debt. Who knows. This is my pet peve - not generally shared by anybody:nuts:

Definitely read the initial and follow-up posts James pointed you to.

 

[Zender67]

10-4 Boghie...

As 2009 comes to an end, the US fiscal environment is "troubling". And I appreciate that no replies come from licensed financial planners... Piece together the news items or headlines and one wonders if we are headed for another major market downturn. Time will tell. Until then, am appoaching the new year with caution - and with appreciation for the posts to my initial querry this morning... A blessed New Year to each of you!