In this video, we’ll talk about the Small Capitalization Stock Index Fund, also known as the S Fund….(read more)

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If you are a federal employee or member of the military, chances are you are familiar with the Thrift Savings Plan (TSP). The TSP is a retirement savings plan created for government employees, similar to a 401(k) plan in the private sector. One of the key features of the TSP is its investment options, which allow participants to choose how their contributions are invested. One of these options is the S Fund.

The S Fund is one of the TSP’s five core investment funds, along with the G Fund, F Fund, C Fund, and I Fund. The S Fund is designed to track the performance of the Dow Jones U.S. Completion Total Stock Market Index, which represents small and midsize companies in the U.S. stock market. These companies are typically not included in the S&P 500 index, which is represented by the C Fund.

Investing in the S Fund can be a good way to diversify your TSP portfolio and potentially increase your overall returns. Small and midsize companies have historically outperformed larger companies over the long term, although they also tend to be more volatile. This means that while the S Fund can offer the potential for higher returns, it also comes with higher risk.

If you are considering investing in the S Fund, it is important to keep in mind your overall investment goals and risk tolerance. While the S Fund can be a good option for investors seeking growth and diversification, it may not be suitable for those with a lower risk tolerance or nearing retirement.

One key advantage of investing in the TSP’s S Fund is its low fees. The TSP is known for its low administrative costs, which can help participants maximize their returns over the long term. Additionally, the TSP offers a range of investment options, allowing participants to easily adjust their portfolio mix as their goals and risk tolerance change.

In conclusion, the TSP’s S Fund can be a good option for federal employees and military members looking to diversify their retirement savings and potentially increase their returns. However, it is important to carefully consider your investment goals and risk tolerance before allocating a portion of your TSP contributions to the S Fund. As always, it is recommended to consult with a financial advisor before making any investment decisions.