TSP investors urged not to panic in wake of stock market dip

The S&P 500 stock index, which the Thrift Savings Plan's C fund tracks, suffered a drop of more than 50 points, or 4.92 percent, on Monday, the first day of stock market trading since terrorists destroyed the World Trade Center's twin towers last Tuesday and paralyzed New York's nearby financial district for the remainder of the week. Money allocated to the C fund is invested primarily in the Barclays Equity Index Fund, a stock index fund that tracks the S&P 500 stock index. The Barclays Equity Index Fund, which is designed to track the performance of the S&P 500 index as closely as possible, holds common stocks of all the companies included in the S&P 500 index. Federal investors shouldn't overreact to Monday's plunge, one expert said. "Certainly panic is the last thing one needs," said Thomas Grzymala, president of Alexandria Financial Associates and a certified financial planner. For one thing, TSP accounts are updated monthly, so federal investors should not be as concerned with day-to-day performance as they should be with monthly returns. The TSP is also a tax-deferred retirement savings plan, meaning investors can't withdraw money without a penalty until age 59 and a half. "Most people have quite a long time to go, I don't think there's any need to worry about this today," said Grzymala. In fact, Grzymala said, "millionaires are made in markets like this, particularly in a defined contribution plan like the TSP." Since the S&P 500 was down 53.77 points today investors will be getting a lot more shares for their money. "You can better accumulate wealth in times like this," Grzymala explained. TSP investors need to keep in mind three things, Grzymala said: patience, discipline, and faith in the future. "Particularly now, in these trying times as we defend our liberties, faith in the future is key," he said. Grzymala said none of his 200-plus clients, about 25 of whom are federal employees, called over the weekend in a state of panic about Monday's stock market opening, in which stocks were widely predicted to plummet. TSP investors should remain calm too, he said. "Don't make decisions in haste. This too will pass. Look at any graph of the stock market in the past 20 years. Overall the trend is up and to the right," he said. Beginning Oct. 9, both active duty and reserve members of the military services may enroll in the TSP, with contributions beginning in January 2002.
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.