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Thread: How SAFE is the G Fund?

  1. #37

    Default Re: How SAFE is the G Fund?

    The G fund will attempt to keep up with inflation as it will track those bond rates. Back in the late 80's to mid-90's we saw G fund retruns between 7% and 9%, believe it or not, compared to today's rate of under 3%.

    That's why if the Fed starts raising rates, and investors are able to get guaranteed rates near 5%, 6% or more in the not so distant future, the stock market will be more vulnerable. High rates are not good for profits.

    Welcome, by the way, Zender!
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.

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  3. Default Re: How SAFE is the G Fund?

    Thanks TSPTalk...appreciate it

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  5. #39

    Join Date
    Mar 2006
    Location
    Raleigh, NC
    Posts
    3,416

    Default Re: How SAFE is the G Fund?

    Think of the G Fund as a cash holding...

    You will NOT be able to retire if you invest in the G Fund through your working career. You will not be investing, you will be saving. At best, it will barely clear inflation. Those 7% and 9% returns Tom mentioned were in periods of high inflation - thus a real rate of return of about 1%.

    Also, the Feds can raid the G Fund if they are unable to increase the debt ceiling. They have done so a few times in the recent past. They have always paid it back with the proper interest. But, they may be able to raid the fund if they are unable to issue debt. Who knows. This is my pet peve - not generally shared by anybody

    Definitely read the initial and follow-up posts James pointed you to.
    Lookin' up at the 'G Fund'!!!

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  7. Default Re: How SAFE is the G Fund?

    10-4 Boghie...

    As 2009 comes to an end, the US fiscal environment is "troubling". And I appreciate that no replies come from licensed financial planners... Piece together the news items or headlines and one wonders if we are headed for another major market downturn. Time will tell. Until then, am appoaching the new year with caution - and with appreciation for the posts to my initial querry this morning... A blessed New Year to each of you!

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