TSP C Fund is a very low cost S&P 500 index fund.
The S&P 500 index is essentially the largest 500 publicly traded companies in the United States.
Largest means market capitalization. Does not mean revenue, sales, number of employees or anything like that. Simply means you take the number of shares outstanding times that by the current share price and VOILA, that is your market capitalization.
The 500 largest market capitalization stocks in the US are in the SP 500.
So, now that you know what the C Fund is how do you incorporate it into YOUR portfolio?
Well, in my opinion, the C Fund should be the foundation of ALL portfolios where the investor won’t need the money for 5 years or more.
If you can withstand some serious market chaos, and by serious I mean a 50% decline like we saw from Oct 2007 to Mar 2009, a 25% decline every 4 years or so and on average a 14% decline EACH YEAR, you could make a lot of money in the C Fund.
In fact, since inception the C Fund has averaged 10.53% a year. That means you’ve doubled your money every 7 years. Put $100k in there in 1988 and that is worth $2 million now.
Put $100k in there in 1988 and have added $5k a year and you’re worth $3 million today!
That’s a lot of money. But how many people actually did that? Not many. Why? Because the markets go up….and then they go down.
WHen they go down people get real nervous and bail. Can’t do that.
So before you buy into the C Fund you’ve got to make a deal with yourself that you will not touch the money for 5 years. If you can convince yourself to stay pat for 5 years running. You’re probably going to do okay.
No guarantees of course. But what are the alternatives? A Bond Fund paying 2.85% and that’s BEFORE taxes and inflation… YIKES!
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As this video was made in 2018, the down yr was 2020 lol probably was the best time to get in hahaha Thanks for the info man. Very useful and helpful
Thank you fam
Thank you for doing a video on TSP!!!!!!!
Several companies in the S&P 500 pay Dividends, when you invest in the C Fund as I have for years, where do these Dividends go? Does Blackrock keep them? Vanguard has a S&P 500 index fund as one example, (VOO), they payout Dividends to their shareholders. Currently that is 2.55% or $6.75 per share. That is around $20K a year just for my account. Now times that by everyone else that invest in the C Fund…..
Ok if I have 17,000 in now. How much more should I be contributing per month to get to a million? How long with average returns.
The TSP is a God send! I've been in it since 93 heck of a ride!
More TSP strategy please. Traditional vs Roth w/ HSA OR FSA.Great videos.
Thank you!
Smash!