Political Drama Has Effects on The Economy

When you listen to or read the politics segment these days, you will likely hear about impeachment hearings, taxes, misreporting, probes and investigation, and so much more.

Unfortunately, news such as these can affect our markets negatively, especially in the dramatic manners the press covers these issues. That is generally how politics affecting the market is affecting your retirement investments.

This is why with recent political dramas and issues, many federal workers at retirement age still continue to work, worried about their retirement earnings, and that their TSP would not be sufficient as they see these political matters have an unpredictable influence on the markets.

It is recommended investors research and figure out what their perspective on money is really like, such as their level of tolerance for risk. That way, they can focus on strategies that keep them within their range of risk tolerance rather than trying to predict market performance. This, in turn, may lessen stress and increase the potential of earnings during market volatility.

Unfortunately, psychology reveals that humans are twice as likely to be pushed by fear rather than by the idea of satisfaction.

Even at times when there are times of growth, many TSP participants are shifting money from indexes that are geared towards growth to indexes such as the G fund that are more low risk in expecting to safeguard their money.

This year, the G fund spiked up 23 percent. Almost $2 billion was transferred into the fund, and other funds aimed at growth saw substantial departures in funds.

The trend indicates that many were predicting declines due to the high market performance that these indexes we’re experiencing.

Keep in mind that trying to time the market also has risks of missing out on increases, where holding until your risk tolerances allows potential growths after experiencing negatives.