With its higher levels of volatility the vast majority of TSP investors should consider participating in our Standard TSP Pilot Portfolio rather than our new Aggressive Portfolio (AP). However, if you are willing to accept more volatile swings in the value of your TSP account, and are at least 3-5 years from retirement, our Aggressive Portfolio will likely provide an additional boost to the performance of your TSP account.
(See our Glossary definitions for Ulcer Index (UI), Ulcer Performance Index (UPI), Maximum % Draw Down (Mdd), and Annualized % Return (AR))
The metrics in Tables IVd and II demonstrate the clear superiority of TSP Pilot Portfolio's dynamic asset allocation, risk control and active management strategies in concept, function and results to the passive, "buy-and-hold" results for the new, highly touted TSP L Funds as well as the regular TSP stock funds.
Trading advisories began in the new TSP Pilot Aggressive Portfolio on 5/30/06. Therefore, the performance numbers for 2006 represent an amalgam of both the model and actual results by definition.
Recent performance numbers for the Aggressive Portfolio clearly demonstrate its dramatically superior control of both market risk and account exposure to downside volatility and loss.
The predominance of emails, received from our valued Federal employees over the years, suggests that an avoidance of market volatility is paramount importance to them. Most prefer to see steady growth in their retirement portfolios rather than shooting for short-term, outsized gains.
Taking superior control over market risk and exposure is where the TSP Pilot "cuts its teeth" and earns its credentials. High year-end returns are useless if investors panic after multiple market losses and prematurely move to cash. Low TSP Pilot account volatility keeps investors comfortable sleeping at night and "in the market" long after others have "thrown in the towel".
From the 28 year history Tables it can be seen that TSP Pilot's Aggressive Portfolio performance clearly outperformed that for the entire offering of TSP stock funds and L Funds while accepting less than ONE THIRD the market the risk (expressed as Maximum % Draw Down (Mdd)) in most cases.
This characteristic represents the backbone of TSP Pilot performance. In recent years that market volatility has been reduced by over 50%!
This underscores the fact that TSP Pilot's dynamically timed portfolio allocations put you miles ahead at the end of the day while insuring your peace of mind during the bad times.
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