how TSP funds fit into % stocks/ % bonds

**va.gov** · 03-02-2009, 12:30 PM

I have a question which I can't figure out if it's subtle and brilliant, or really, really stupid.

When reading personal finance advisors, they usually recommend percentage allocations of something like 60% stocks / 40% bonds or 65% stocks / 25% bonds / 10% cash (or whatever --just picked those out of the air.)

Well, obviously, the CSI funds are the stock portion, and F is bonds, but do we regard the G fund as cash or as a type of bond? Traditional descriptions of "bonds" do included Gummint securities, but the way that G funds are set up, they act more like cash. Or at least I think that they do.

So if I was to follow one of these percentage examples, would I make the bond portion 100% the lowly F fund, or both F and G, or maybe count G half bond, half cash, or what?

As expected, my attempts to move things around last year weren't very helpful. So now I'm really trying to get things rebalanced and off and running, to where I can just cautiously glance at them every now and again and then hurriedly avert my eyes.

11-12 years to retirement, oh boy.

**alevin** · 03-02-2009, 03:44 PM

Hi there VA. Personally I think of G as my cash account. Bonds can go down, G doesn't, it just may pay so little that it might as well be cash-true right now. Not always true tho. Back in the mid-80s G paid a measurable amount-if I remember rightly it paid around 8%-but that was because Paul Volker had raised interest rates way way high to stop screaming inflation, or something like that.

I was unaware of market gyrations back then, a totally market naive-unschooled brandnew 20-something. Wish I'd understood what I was being handed in terms of TSP, I'd have been heavy in F during that era, but sigh, I left my 1% in G cause I didn't know anything about the market. Hadn't even had a savings account up to that point.