Thrift Savings Plan Strategy: Buy Low and Diversify


The Thrift Savings Plan (TSP) is a "a retirement savings plan for civilians who are employed by the United States Government and members of the uniformed services" (see

In general, it has 5 funds

Your hard-earned money can be allocated among these choices many ways.

There are two main rules of investing:

What follows is a TSP investing strategy that satisfies both of these, and is simple to carry out.

  1. Get the prices of each fund. Call these G, F, C, S, and I.

  2. Then take the inverse of each price. In other words, calculate 1/G, 1/F, 1/C, 1/S, and 1/I. Weighting by the inverse of the price incorporates the "buy low" rule.

  3. Then take the sum of the inverses, ie. SUMINV = 1/G+1/F+1/C+1/S+1/I

  4. Then take each inverse and divide by the sum of the inverses, and round that number to the nearest integer (because your allocation percent has to be a whole number), ie. calculate

    • G% = round((1/G)/SUMINV)
    • F% = round((1/F)/SUMINV)
    • C% = round((1/C)/SUMINV)
    • S% = round((1/S)/SUMINV)
    • I% = round((1/I)/SUMINV)

    These resulting percents are your allocation.

  5. Check if G%+F%+C%+S%+I% = 100%. Because of rounding to the nearest whole number, the sum may be off from 100% in either direction by 1 or 2 percent and therefore you may have to tweak the percents slightly to make sure they add to 100%. Say you do steps 1-4, and you're off from 100% by a number we'll call DIFF, then an example of one strategy would be

    • If DIFF < 0, then C% = C%-DIFF (that is, add a "boost" to C%)
    • If DIFF > 0, then G% = G%-DIFF (that is, take away from G%)

    And now G%+F%+C%+S%+I% = 100%.

  6. Using daily data from, calculate these percents periodically and change your allocation accordingly. Consider reallocating when your current allocation, (G%,F%,C%,S%,I%), has a "large" distance away from a calculated allocation, (G%*,F%*,C%*,S%*,I%*).

    • Let distance = abs(G%-G%*)+abs(F%-F%*)+abs(C%-C%*)+abs(S%-S%*)+abs(I%-I%*), where abs is the absolute value
    • If distance > 5 then reallocate according to (G%*,F%*,C%*,S%*,I%*)

The spreadsheet can be found here.

Remember, don't consider anything in this article beyond "Buy Low" and "Diversify" as investment advice. This article is just my musings/experiment on how to buy low and diversify, at the same time, in the TSP. Have fun!

Regarding investing: I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions.

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