US Federal employees can participate in the Thrift Savings Program (TSP) to save for retirement. Investors can choose from several stock/bond funds as they see fit.
TSP Pilot is a privately owned/operated fee-based service that advises TSP participants on how/when to reallocate their TSP investments so as to maximize gain and/or minimize loss. On this page, they compare how an investor would have done by sticking to the TSP “C” stock fund for the past 27 years versus how that investor would have done by following TSP Pilot’s reallocation advice.
The problem(s):
I wanted to double-check their numbers, and that’s when I encountered the first problem. The numbers on that page aren’t a table; they are presented as a PNG graphics image of a table. Did they do this on purpose to make it more difficult to copy the numbers into a spreadsheet for independent analysis, or is there some other compelling tech/HTML reason not to use a text/table format? :dubious:
The other problem is that their math doesn’t work out. I typed out the numbers from their table in a spreadsheet, and came up with annualized returns of 9.99% and 17.98% for the “C” fund and the TSP Pilot advice, respectively. This doesn’t match their reported values of 8.3% and 19.9%. :dubious:
So did I do the math wrong, or did they?
Finally, if you plot out the annual returns shown in the table for the “C” fund and the TSP Pilot, the TSP Pilot appears to have had a brief period in the late 1990s and early 2000s during which they racked up big gains while the “C” fund did less well or even lost ground, but outside of that window, their track record doesn’t seem all that stellar. In other words, they don’t seem to be any better than the typical mutual fund professional manager, and they’re leveraging a brief period of good fortune to make it seem like a lucrative 27-year average means they will add value in the coming years.
So what’s your take on all of this? Would you pay $150 per year for their advice?
Still, it should be possible to get advice at no charge from someone in the federal government. I seem to recall talking to one of those guys a few times helping a client manage their TSP.
No, I wouldn’t, and it isn’t academic for me as my wife will likely have well into the 6 figures at least in her TSP when she retires in many years. You are basically asking “can these people really beat the market” and the answer, as always, is no way in hell after fees.
Edit to add, I have it 100% in L 2050.
Do you have OneNote? Copy the image into OneNote and use the ‘Copy Text from Picture’ option to convert the graphic into text which you can then put into Excel or whatever.
I’m getting 17.98% for the annualized returns and 18.85% for a simple average of each year.
That is, if you invested $1 at the start, you’d end with $86.83, which is the same as if you earned 17.98% every year. On the other hand, if you invested $1 in every year and then reset at the end of the year, you’d average $1.1885 per year.
I think you need to reread what I wrote. I did indeed calculate annualized returns, i.e. the 27th root of the product of all 27 annual returns.