I can't emphasize enough the importance of diversification! Your job is an investment in your company, likely your biggest investment. I started working for a F500 Telco with a $20B market cap 6 years ago. They've paid me a good salary (even if not as much as I'd have liked all the time) and benefits. But in the last 6 years, the stock is down 90% and removed from the S&P500, and thanks to the recent WSJ lead cable studies, the fact my RSUs are nearly worthless weighs far less on my mind than the fact that, if the company declares chapter 11 my job could be in jeopardy. I think we're oversold, but I won't touch the stock--the risk of being wrong is WAY too high.
My first comment in 5+ years of reading HD, but need to point out the downside of the TSP. While I was in the navy (~2015), a study came out showing the TSP consistently underperformed its benchmarks by over a percent, in both up and down markets. Despite being a passive fund, you were effectively taking a huge expense hit which is why I immediately rolled over into a vanguard IRA when I got out. It turns out that, like most government programs, because the TSP doesn't face competition (as the navy couldn't have chosen a far more efficient vanguard fund, even if it wanted to), there is no incentive to be efficient. Worst, the cost was hidden so most participants who didn't keep up on the news, had no idea the cost. Coincidentally I had the same experience with military Healthcare, nearly requiring emergency surgery after something as trivial as three weeks of mistreated strep throat. While my Healthcare was financially free, the longterm costs of inferior care were nearly catastrophic.
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I can't emphasize enough the importance of diversification! Your job is an investment in your company, likely your biggest investment. I started working for a F500 Telco with a $20B market cap 6 years ago. They've paid me a good salary (even if not as much as I'd have liked all the time) and benefits. But in the last 6 years, the stock is down 90% and removed from the S&P500, and thanks to the recent WSJ lead cable studies, the fact my RSUs are nearly worthless weighs far less on my mind than the fact that, if the company declares chapter 11 my job could be in jeopardy. I think we're oversold, but I won't touch the stock--the risk of being wrong is WAY too high.
Post: The Company You Keep
Link to comment from July 19, 2023
My first comment in 5+ years of reading HD, but need to point out the downside of the TSP. While I was in the navy (~2015), a study came out showing the TSP consistently underperformed its benchmarks by over a percent, in both up and down markets. Despite being a passive fund, you were effectively taking a huge expense hit which is why I immediately rolled over into a vanguard IRA when I got out. It turns out that, like most government programs, because the TSP doesn't face competition (as the navy couldn't have chosen a far more efficient vanguard fund, even if it wanted to), there is no incentive to be efficient. Worst, the cost was hidden so most participants who didn't keep up on the news, had no idea the cost. Coincidentally I had the same experience with military Healthcare, nearly requiring emergency surgery after something as trivial as three weeks of mistreated strep throat. While my Healthcare was financially free, the longterm costs of inferior care were nearly catastrophic.
Post: A Costly Education
Link to comment from June 18, 2022