The Frustrated Underinvested

[TommyIV]

In today's Market Commentary, Tom said,

The trend is up however, and given the fact that we have seen a lot of skepticism, the dips have remained shallow and, depending on whether you look at the weekly or monthly chart of the S&P 500, the recent break above resistance on these charts may be opening the door to frustrate the underinvested even longer.

This morning, the indices opened higher, and TSP stock funds are set to get more expensive to buy. Yet, ten 'underinvested' AutoTracker members used IFTs today to add more stock funds to their TSPs despite the rising costs and the already lofty prices. No members were moving the other direction, from stock funds to the G or F-fund.

This small sample size made me consider how much the Fear of Missing Out (FOMO) has driven the market higher. Without considering the plethora of other contributing factors to market action, a cascade of cash-heavy investors could drive stock prices higher, provoking the next wave of frustrated underinvested. There are plenty of examples of these FOMO driven bubbles throughout the history of markets, and they all seem to end when cash runs dry among buyers.

So, how much cash is left to drive this market higher?

If we take our sample size from the TSP Talk AutoTracker... plenty.


The exact sample size I am looking at is of the 448 AutoTracker members who have made at least 1 IFT in 2025. That ranges from 1 IFT to 30 IFTs. I'm leaving out those who haven't used an IFT this year because they are either inactive or unlikely to change their allocations.

The average allocation of these 448 active members:

G-fund: 40.7%, F-fund: 2.3%, C-fund: 19.3%, S-fund: 23.4%, I-fund: 8.9%


These active AutoTracker members hold at least 43.0% of their TSP outside of stock funds. As TSP Talk members, I suspect many of these G-fund positions come from members bracing for a significant pull-back. But it is a fair example that there is likely plenty of cash among broader retail investors to fuel this market higher without outside intervention (Monetary policy change, geopolitical event, etc.).

This is not a plea to buy stock funds while you can. The G-fund may be an important tool in maintaining your wealth depending on how much time you have left ot invest. And if you read today's Market Commentary, then you know how quickly these bull runs can flip direction.

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[James48843]

So, how much cash is left to drive this market higher?

If we take our sample size from the TSP Talk AutoTracker... plenty.


The exact sample size I am looking at is of the 448 AutoTracker members who have made at least 1 IFT in 2025. That ranges from 1 IFT to 30 IFTs. I'm leaving out those who haven't used an IFT this year because they are either inactive or unlikely to change their allocations.

The average allocation of these 448 active members:

G-fund: 40.7%, F-fund: 2.3%, C-fund: 19.3%, S-fund: 23.4%, I-fund: 8.9%


These active AutoTracker members hold at least 43.0% of their TSP outside of stock funds. As TSP Talk members, I suspect many of these G-fund positions come from members bracing for a significant pull-back. But it is a fair example that there is likely plenty…..(snip)

This is not a plea to buy stock funds while you can. The G-fund may be an important tool in maintaining your wealth depending on how much time you have left ot invest. And if you read today's Market Commentary, then you know how quickly these bull runs can flip direction.

Excellent observations- It’s extremely hard to decide when to buck the trend, and when to just let it ride. If there really that much money on the sidelines, it could keep going for a while.

I will comment this- Back in the 1990’s about 65% or more of everybody’s money was in the G fund. Many, many employees never knew much about investing, and didn’t put their money into “C”. There was just C and F and G. The “S” and “I” funds were added later,

It wasn’t until after daily valuation, the adding of S and I, and more training that more money- around 50% - was flowing into something other than G. There are still a LOT of people who never leave the safety of G, and miss out on the gains.

 

[JTH]

In my defense of the 100% Paper-G-Fund allocation since 9-May. I'm in a state of denial, willful blindness, avoidance, and self-sabotaging ignorance slathered with a heavy layer of apathetic bitterness. It's mostly a TSP issue, I'm just not as competitive as the old days.

From the April correction we've had two -3% pullbacks, but you had to catch those on the day of, that's a tight window to trade.

 

[Boghie]

You didn't have to 'catch a pullback'.
This year, as in most, you just had/have to be 'in to win'.
There is little or no value trying to catch some 0.84% pullback or something.

You have 500 CEOs, a ton of C??s, and a bunch of small/medium sized greedy plutocrats that want their various businesses to grow and produce profit. You don't have a 'managed' economy guided by the best and brightest of our politicians, lawyers, and thugs. You have the hidden hand in motion. Anyone notice the boom in Federal tax revenue. Beuller, Beuller... In general, you don't pay taxes on losses...

I am having some 'Fear of Missing Out' issues as I type. I moved to 60% G late last month and am hating life. Then again, September and October generally kinda suck so there is that. I won't be missing out in November!!!