Great motivation to invest in TSP equities

General TSP Discussion.

Moderator: Aitrus

Post Reply
User avatar
cswift01
Posts: 819
Joined: Thu Dec 08, 2016 10:46 am

Great motivation to invest in TSP equities

Post by cswift01 »

Check out the response from the present day TSP millionaire:

http://federalnewsradio.com/mike-causey ... llionaire/

Enjoy!

Me

User avatar
TSPsmart
Posts: 212
Joined: Fri Nov 14, 2014 12:24 pm

Re: Great motivation to invest in TSP equities

Post by TSPsmart »

I bit of info that is missing from this article is the TSP millionaire started investing shortly after the great secular bull market started in the early eighties and rode it up to 2000. If they stayed invested, they made little from 2000 - 2013 and then rode the current bull market a bit higher.

The current market is valuing corporate earnings about 4 times as much as they did when the secular bull market started. Top tax rates were over 70% when Reagan was elected and now we have only 20% capital gains taxes meaning a lot of savings have flowed into investments. Interest rates dropped from over 12% to under 3%. Debt levels across the board have exploded higher.

My point is this - those high returns are not going to happen again over the next 20 years. Stocks today are very near 1929 and 2000 valuation levels. Market tops happen when the market is euphoric like today and the market bottoms when investors are extremely pessimistic.

Save and invest - yes. Buy and hold stocks for 20 - no. The most important investing tip is to avoid the large losses even if it means missing some of the short term gains.

The current bull market was driven by central bank pumping liquidity into the financial markets, not economic growth. It has created a lot of confusion in analyzing the markets these days and made too many investors complacent. Many of those TSP millionaires will not remain millionaires if they keep doing what they did to get there.

User avatar
cswift01
Posts: 819
Joined: Thu Dec 08, 2016 10:46 am

Re: Great motivation to invest in TSP equities

Post by cswift01 »

TSPsmart wrote:I bit of info that is missing from this article is the TSP millionaire started investing shortly after the great secular bull market started in the early eighties and rode it up to 2000. If they stayed invested, they made little from 2000 - 2013 and then rode the current bull market a bit higher.

The current market is valuing corporate earnings about 4 times as much as they did when the secular bull market started. Top tax rates were over 70% when Reagan was elected and now we have only 20% capital gains taxes meaning a lot of savings have flowed into investments. Interest rates dropped from over 12% to under 3%. Debt levels across the board have exploded higher.

My point is this - those high returns are not going to happen again over the next 20 years. Stocks today are very near 1929 and 2000 valuation levels. Market tops happen when the market is euphoric like today and the market bottoms when investors are extremely pessimistic.

Save and invest - yes. Buy and hold stocks for 20 - no. The most important investing tip is to avoid the large losses even if it means missing some of the short term gains.

The current bull market was driven by central bank pumping liquidity into the financial markets, not economic growth. It has created a lot of confusion in analyzing the markets these days and made too many investors complacent. Many of those TSP millionaires will not remain millionaires if they keep doing what they did to get there.


Based on what you say about the upcoming bear market and central banks, I know what you're thinking (I've also seen those sources). I too think there will be a bear coming, but I think it has to do with populistic behaviors instead of central banks. Populism encourages mercantilism, which is so economically flawed it hurts (in my opinion). I think even if the right people win in Europe and things change in the US, then the populistic tendency is still going to impact economic policy.

Me

Post Reply

Fund Prices2024-03-27

FundPriceDayYTD
G $18.14 0.01% 1.00%
F $19.09 0.26% -0.68%
C $82.11 0.87% 10.42%
S $82.19 1.48% 6.61%
I $42.68 0.56% 6.21%
L2065 $16.38 0.84% 8.36%
L2060 $16.38 0.84% 8.36%
L2055 $16.39 0.84% 8.36%
L2050 $32.73 0.71% 6.94%
L2045 $14.91 0.67% 6.56%
L2040 $54.37 0.63% 6.20%
L2035 $14.34 0.58% 5.77%
L2030 $47.66 0.53% 5.35%
L2025 $13.14 0.31% 3.40%
Linc $25.60 0.24% 2.79%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".