From: Bill Lucy 

In article , nomail{at}hotmail.com says...
> It won't always be good investments, but it will be spread out to minimize
> the risk. The stock fund in the TSP plan may very well have held shares in
> Enron etc., but probably at a miniscule level, indeed I'm sure their
> prospectus limits their holdings in any one stock to a very small level. So,
> if they hold, for example, stock in 1000 companies and 5 of them go
> completely bankrupt before they can sell any of those holdings, they still
> have 995 companies that are performing.

Many of the proposals focus on the TSP "C" fund (Barclay's Equity
Index Fund). It is currently the largest asset of the five choices, but
only because of large gains in the last fiscal year. FWIW, the C fund lost
$10 billion in fiscal 2002, and gained $11 billion in 2003.
Historically, the largest asset has been the "G" fund (U.S.
Government Securities Investment fund), which lately has been returning
over 4% each year.


One must be quite careful to ignore the ROR on a single investment choice.
It's much more important to compare an aggregate, e.g. a worker who has
both C and G fund money. It brings down the expected ROR, but it also
insulates them from those deadly -22% returns (as the C fund suffered in
2002).


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