Re: (L)'s NOT DESIGNED FOR DIVERSIFICATION
The L funds should not be used for diversification as you cannot easily know how it is diversified (constant re-balancing, etc.) The Thrift Board promotes it as a "set and forget" tool, not a diversification tool. While it is diversified, it is not diverse for the sake of diversity, but rather designed for long term risk exposure management. The confusion is for those who wish to diversify in the traditional sense with a common understanding will not accomplish this goal by using an L fund strategy. To maintain a specific balance in TSP, you must do so manually, and often.
Originally Posted by
Globalpack
I think you may have further confused any "young pups" out there, no offense. It isn't clear to me exactly why you say the L funds shouldn't be used for diversification purposes. The L funds are diversified by design. All the funds (C,S,I,F,G) are in each L fund in varying amounts depending on your time line and the closer you are to retirement the amount allocated in the lower risk G fund increases.
Each L fund essentially started at the L 2040 fund, but over time on a quarterly basis changes to the L income fund.
Official Retirement Date: 06-31-2014!
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