TSP 2020 L Fund

The TSP website describes the basic initial portfolio structure of their 2020 L Fund. This is considered a "moderate" portfolio mix, and TSP is currently targeted to those TSP'ers who are expecting to start drawing down their accounts on or before 2020.

The mix is more aggressively slanted to the TSP stock funds and closely matches the more typical "55/45" (bond/stock) mix lifestyle portfolios available for investors in other 401k plans. Offering a "moderatel" mix of stock and bond funds, the 2020 L Fund might appeal to those investors who are moderately optimistic about the future of the stock market and willing to accept a moderate level of market risk to reach their retirement goals.

The 2020 L Fund would have shown you a 8.8% annualized return over the last 28 years while steadily dropping your account value Maximum % Draw Down by about 31.6% several times during that period!

This slide of this "moderate" portfolio would have been tough for anyone to sit through without a knee-jerk reaction to sell out. In fact that's the essential problem with all of the L Funds except perhaps for the income fund. The Ulcer Performance Index of this L Fund was a miserable -.1.

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