Recommended TSP Model positions for April, including the new Premium TSP Model, are listed in the table below.
TSP TAA Models - Apr 2014
|TSP FUND||BASIC TSP |
|ENHANCED TSP |
|ULTRA SIMPLE TSP |
The Basic TSP Model is derived from the classic tactical asset allocation (TAA) model developed by Mebane Faber. Mr. Faber’s model include five asset cetegories – US stocks, International stocks, commodities, real estate, and bonds. The Thrift Savings Plan has no funds available for commodities and real estate, so my Basic TSP Model is adapted using the funds that are available in the TSP. My Basic TSP Model does use the same timing signals that Mr. Faber’s original model uses.
The Enhanced TSP Model includes additional signals that allow for partial positions in each asset rather than “all in” or “all out” as in the Basic TSP Model. The additional signals are designed to shift some money to the less volatile funds when appropriate and hopefully avoid more of any downturn. As with any mechanical signal, it is right some of the time – not all the time.
The Ultra Simple TSP TAA Model was introduced at the beginning of 2013 and is extremely easy to follow and use without calculators or spreadsheets. You can read more about it here.
All of these TSP TAA Models should provide reasonable long term returns with reduced volatility compared to simply buying and holding the C Fund for example.
If you wish to make changes to your TSP account’s fund allocations, remember you have until noon Eastern Time Tuesday to submit your Interfund Transfer request in order for your request to be effective at Tuesday’s market close. Here is a link to TSP Interfund transfers for your convenience.
Enjoy the rest of your week!
Disclaimer: The Boomers’ Beacon Blog and its author are not financial advisers. The Boomers’ Beacon Blog and its author do not offer recommendations or personal investment advice to any specific person for any particular purpose. All TAA Models and articles posted here at The Boomers’ Beacon are for educational and entertainment purposes only. Please consult your own investment adviser and do your own due diligence before making any investment decisions. If you choose to follow one or more of the TAA Models here or any other information presented in this blog for investing purposes, consider dedicating only a portion of your funds to the strategies presented here. As always, past performance is no guarantee of future performance.