TSP SAFETYNET SYSTEM
The foundation to the success of the TSP SafetyNET system is its unique approach to investment management. With our TSP management team keeping a watchful eye on scientific and technical indicators, the system helps individuals move out of the market when danger seems to be approaching.
This scientific technical TSP management system allows individuals to achieve higher financial profits mainly because when your TSP investments are protected from big losses instead of relying on huge profits.
With our expert TSP management team providing you with newsletter alerts when danger is approaching, your TSP can grow as you work with our professional staff.
It has been proven that one approach to TSP growth is safeguarding your portfolio against financial losses. The reason is because once your TSP has lost principal, there is a smaller amount of money to work with. The miracle of compounding works against you. It is for this reason that using professional TSP management is so important.
While the TSP SafetyNET newsletter does not tell you immediately when to get out as the markets start to decline, the loss is typically minor compared to a buy and hold strategy. If you experience a small loss (as an example, 5% off the high) it is much easier to recover from that loss than if your portfolio experiences a high loss (20-50%) before the market starts moving up again. Recovery is much more difficult with large losses because the profits required to recover from the large loss must be significantly larger just to get back to where you started.
After a significant loss you are digging out of a hole using a small shovel which will require more work to recover. For instance, when you experience a 50% loss in managing your TSP then you will need a 100% gain to get back to where you began.
If you move away from C, S, I or F funds during early losses and then move back in when our TSP management indicators tell you when it may besafe to return, your funds have the opportunity to grow faster. To put it a different way, the investment game is won with a strong defense and hitting singles and doubles instead of depending on hitting homeruns to win the game.
TSP SafetyNet safeguards your TSP
So how exactly do you manage your TSP?
Unfortunately most Federal workers do not understand how. This is why around 45% basically “buy and hold” in the G fund. In the past, the G fund has hardly kept pace with inflation, so you can either tread water or rarely move forward. This is simply not the most effective way to manage your TSP both for protection and growth.
The system that we use is based on research by Michael K. Hartmann.
The exact way the system works is proprietary but a significant part of the success of his system is due to a quick response to downturns and frequent trades. The Thrift Savings Plan limits the number of trades that can be implemented each month but the system works very effectively due to the modifications Mr. Hartmann made to his system to accommodate the inherent limitations of the Thrift Savings Plan.
The graph below compares the rate of return of the Rapid Response TSP SafetyNET system (back tested) based on Mr. Hartmann’s research and the “buy and hold” approach for the different TSP funds from March 2004 to March 2015.
The Rapid Response TSP SafetyNET system manages your TSP by assisting to give protection from downturns in the marketplace. The major goal of our approach is to minimize the risk of big losses in your important retirement fund similar to what was encountered in 2008. Not many of us can sleep well at night when we have experienced a great loss to our retirement fund in just a day and our purpose is to support you in managing your TS.
QUICK RESPONSE TO MARKET CHANGES AND FREQUENT TRADES
Usually the greater the frequency of trade results in higher rates of return. But the Thrift Savings Plan limits the number of allocation changes to two times a month (With exclusion where you can still allocate your funds into the G fund even after two changes in one month). So this limitation can reduce the rate of return but also makes the management of your TSP much simpler since you do not make a lot of modifications all of the time. We have observed over the years of helping people manage their TSP that usually they don’t mind making changes every two weeks if the results are worth the added work. We’re continuously working on discovering the “sweet spot” where the rate of returns are increased but still fall within the two monthly allocation change limitation.
The major point to remember is that we use a sophisticated system to assist you in managing your TSP for safety from loss and profit optimization both working together for your financial freedom when you retire.
An important part of the TSP SafetyNET system is the essential step of identifying how every single reader is comfortable with having risks with their retirement funds. This is a very personal part and there are many various things to take into consideration when looking at your own ability to handle risk in order to manage your TSP effectively. We understand that everybody has a unique approach in their TSP investment philosophy as to how they deal with the overall question of risk as opposed to reward. This is affected by many things such as personality, financial needs, family size and wants, retirement plans/goals and the period of time they are in their career. We understand that there is actually no right or wrong technique but it is essential to respect the value of risk tolerance when developing the management of TSP investments. We use a more accurate analysis in that we have 5 different risk tolerance categories whereas other TSP investment systems either neglect the whole subject completely or use 2 or 3 categories. We decided to use 5 categories to help our readers “fine tune” their own personal approach. The scoring from the questionnaire assists placing an individual into the most suitable group which best identifies every individual’s risk tolerance philosophy. These groups are:
- Very conservative
- Moderately aggressive
- Maximum growth
There are lots of personal factors that go into identifying your own category and finally you will be the final judge. After you identify the ideal group for your own personal situation, we will send out TSP allocation suggestions that are most suitable for your own ideas on managing risk versus reward. You have the opportunity to redo the questionnaire and to change your category whenever you want to choose and we will adjust our suggestions to your modified group. In fact we suggest that all of our readers overview the questions every year and make changes to the TSP management approach. Since we appreciate that everyone has personal needs in their life circumstances, we have developed a system that values and accommodates every individual needs.