The TSP Pilot Standard Portfolio is an actively managed, dynamic portfolio of Thrift Savings Plan funds that constantly adjusts all stock and bond fund percentage balances to always be in concert with the intermediate to long term market trends as stock prices rise and fall.
TSP Pilot's timing and fund selection systems reduce your TSP account's risk to a bare minimum while maximizing its long-term performance.
TSP Pilot uses thoroughly researched and back tested computer automated and objective trend following systems based on effective fund timing and fund selection (see mail menu selections) for optimizing and maximizing your retirement plan performance.
The secret to the success of the TSP Pilot portfolios is that they are actively managed. Most "managed" 401k plans are essentially comprised of suggested "buy-and-hold" fund positions in various "balanced" ratios. However, statistics show that many TSP participants choose their fund balance percentages when they set up their plans and rarely re-visit them again until a stock market selling panic sets in.
When stock prices fall dramatically, many TSP participants will switch out of any stock funds holdings they may have and into the safe harbor of the G fund--and usually at precisely the WRONG time. These TSP investors then typically watch in alarm as stock prices bottom-out and then go through the roof leaving them sitting behind in the go nowhere G fund!
Actually, this investor behavior is more typical than not. However, it is certainly NOT the most effective way to invest in index funds--either in the TSP Plan or in any 401k or retirement plan for that matter.
First, What TSP Pilot is NOT...
TSP Pilot is NOT just another TSP "Lifestyle Fund" or (L Fund). The TSP L Funds are simply fixed portfolio mixes of the existing TSP funds passively arranged into buckets according to age or years to retirement. They offer no dynamic management whatsoever and do NOT adjust their various allocations of TSP funds to changing market conditions. The TSP L Funds are intended to be "buy-and-hold" stock and bond funds that leave you heavily exposed to sudden and protracted market collapses.
The risk/reward performance of the TSP L Funds compare poorly to the dynamically managed TSP Pilot Portfolios (see Table XXI).
The problem with all these simple, traditional, passively managed "buy-and-hold" fund portfolios is that in order to achieve an acceptable return over the rate of inflation they must hold significant and unchanging percentages of stock funds.
Well, as you know, sometimes stock funds go down as well as up, and when they do go down, your account goes down with them. During the bear market from 3/22/2000 to 3/11/2003 the all TSP stock funds fell some 50% in value and 50% again recently in 2007-2009! Even the new balanced and moderate risk TSP 2020 "Lifestyle Fund" would have fallen over 31% in value during those periods!
While stock fund prices eventually recover after a severe bear market, it can take years before a final bottom is reached. In the meantime investors sitting in those fixed and passively managed portfolios must absorb the losses, often month after month, or year after year while waiting for the eventual market turnaround. However...
Those huge bear market losses are avoidable.
The TSP PILOT Difference
TSP Pilot makes specific recommendations for you to change your fund percentage allocations and balances to match changing market conditions at key market junctures keeping you on the right side of the market.
For example TSP Pilot moved from stock funds to bond funds in March of 2000 completely avoiding the devastating three year bear market that followed. As we will demonstrate in our TSP Pilot performance analysis, the slope of the entire risk/reward horizon is improved through effective and professional fund timing and fund selection criteria.
When the TSP stock funds plummeted almost ~50% during that 2000-2003 bear market, the actively managed, dynamic TSP Pilot Standard portfolio was actually UP 2.8% with a maximum draw down of less that 14%...and that's in a bear market! (see Table I).
In fact while the TSP C Fund was some 25% LOWER at the end of 2009 than it was at its peak in October of 2007, the TSP Pilot Standard Portfolio was actually net HIGHER by over 6% in the same period!
The dynamically managed TSP Pilot Portfolios, through judicious fund timing and fund selections, actually REDUCE risk across the board for all TSP investors while MAXIMIZING performance.
Both the Standard and Aggressive Portfolio recommendations will be carried for TSP Pilot subscribers on our Current Advisory Page.
The metrics in Table II above demonstrate the clear superiority of TSP Pilot Portfolios' dynamic asset allocation and active management strategies in concept, function and results to the passive, "buy-and-hold" results for the new, highly-touted TSP L Funds.
It can be seen from Table II that TSP Pilot's performance was about DOUBLE that for most of the TSP L Funds while accepting less than ONE QUARTER of the market risk in most cases. In fact the risk Maximum % Draw Down (Mdd) of the highly performing TSP Pilot Standard Portfolio was well less than that for even the most conservative TSP Income L Fund almost entirely invested in the TSP bonds funds!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.
Don't test the retirement waters alone. Put your TSP ship a league ahead by requesting your FREE BACK ISSUE or by SUBSCRIBING at our special reduced rates today!