Finance and Credit Professional

Are TSP plan participants allowed to select their own stocks? With a TSP plan, participants are not permitted to pick their own individual stocks, instead, they choose investment allocations from up to five different agency approved plans. These include U.S. treasury bonds, fixed income assets, international stocks, common stocks, and small capitalization stocks, each of which carries their own risks and rewards.

Fixed income index investments, known as F funds, are invested in high quality securities which track the LBA bond index, a group of U.S. government, mortgage, and corporate securities. F funds are similar to performance to the vanguard total bond market index fund, or VBMFX. With an F fund, TSP participants with low risk tolerance are able to avoid the stock market.

Government securities investments, or G funds, are invested in short term U.S. treasury securities or bonds, which are guaranteed by the federal government. These types of investments are unique in the sense that they are government securities backed by the full faith and credit of the U.S. Government, and are equivalent to high yield stable value funds, meaning that there is almost no risk of either loss of principal or investment.

Small capitalization stock investments or S funds are invested in a portfolio of stocks that replicate the performance of the Wilshire 4500 Index, and are the largest U.S. stocks, excluding stocks of the standard and poor, or S

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