How to get 10 year cumulative return on TSP account

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Topic Author
Jimsad
Posts: 164
Joined: Mon Mar 20, 2017 5:54 pm

How to get 10 year cumulative return on TSP account

Post by Jimsad » Fri Sep 13, 2019 5:46 pm

Hi .
On the TSP account , only one year performance return is reported .
We wanted to find out the 10 year cumulative return just like the way vanguard reports on their accounts .
When we called , the customer service said they do not report that . Is there a way to get this ?

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HueyLD
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Re: How to get 10 year cumulative return on TSP account

Post by HueyLD » Fri Sep 13, 2019 9:39 pm

https://www.tsp.gov/PDF/formspubs/oc05-16w.pdf

This TSP publication shows you how to calculate multi-year cumulative return.

rascott
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Re: How to get 10 year cumulative return on TSP account

Post by rascott » Fri Sep 13, 2019 11:58 pm

Rather ridiculous they don't just report this, rather than giving people a math problem to calculate. Seems writing the paper would have taken as much time as just doing it.

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Jimsad
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Re: How to get 10 year cumulative return on TSP account

Post by Jimsad » Sat Sep 14, 2019 6:15 am

HueyLD wrote:
Fri Sep 13, 2019 9:39 pm
https://www.tsp.gov/PDF/formspubs/oc05-16w.pdf

This TSP publication shows you how to calculate multi-year cumulative return.
Thanks for your reply .
Looks complicated And I am not good at Math 🙁
But will give it a try with my high school kids help !

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vineviz
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Re: How to get 10 year cumulative return on TSP account

Post by vineviz » Sat Sep 14, 2019 6:16 am

rascott wrote:
Fri Sep 13, 2019 11:58 pm
Rather ridiculous they don't just report this, rather than giving people a math problem to calculate. Seems writing the paper would have taken as much time as just doing it.
Perhaps, but it’s valuable for investors to know how to compound a return.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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HueyLD
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Re: How to get 10 year cumulative return on TSP account

Post by HueyLD » Sat Sep 14, 2019 6:31 am

Jimsad wrote:
Sat Sep 14, 2019 6:15 am
HueyLD wrote:
Fri Sep 13, 2019 9:39 pm
https://www.tsp.gov/PDF/formspubs/oc05-16w.pdf

This TSP publication shows you how to calculate multi-year cumulative return.
Thanks for your reply .
Looks complicated And I am not good at Math 🙁
But will give it a try with my high school kids help !
You don't need to be good at math. You just need to set up a very simple Excel spreadsheet and let the spreadsheet do the math for you.

I posted that TSP file as a public service because it is a valuable knowledge for any investor and it is very simple to set up in Excel. I am so pleased that the TSP wants to show us how to fish instead of just feeding us fish.

rascott
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Re: How to get 10 year cumulative return on TSP account

Post by rascott » Sat Sep 14, 2019 7:29 am

vineviz wrote:
Sat Sep 14, 2019 6:16 am
rascott wrote:
Fri Sep 13, 2019 11:58 pm
Rather ridiculous they don't just report this, rather than giving people a math problem to calculate. Seems writing the paper would have taken as much time as just doing it.
Perhaps, but it’s valuable for investors to know how to compound a return.

Yes it is, and BHs likely enjoy doing it. However, I imagine the number of Fed employees who have ever done so is sub 1%.

Topic Author
Jimsad
Posts: 164
Joined: Mon Mar 20, 2017 5:54 pm

Re: How to get 10 year cumulative return on TSP account

Post by Jimsad » Sat Sep 14, 2019 8:24 am

HueyLD wrote:
Sat Sep 14, 2019 6:31 am
Jimsad wrote:
Sat Sep 14, 2019 6:15 am
HueyLD wrote:
Fri Sep 13, 2019 9:39 pm
https://www.tsp.gov/PDF/formspubs/oc05-16w.pdf

This TSP publication shows you how to calculate multi-year cumulative return.
Thanks for your reply .
Looks complicated And I am not good at Math 🙁
But will give it a try with my high school kids help !
You don't need to be good at math. You just need to set up a very simple Excel spreadsheet and let the spreadsheet do the math for you.

I posted that TSP file as a public service because it is a valuable knowledge for any investor and it is very simple to set up in Excel. I am so pleased that the TSP wants to show us how to fish instead of just feeding us fish.
Not sure I fully agree with this .
So if somebody does not know how to do spread sheet , should not be investing ?

Topic Author
Jimsad
Posts: 164
Joined: Mon Mar 20, 2017 5:54 pm

Re: How to get 10 year cumulative return on TSP account

Post by Jimsad » Sat Sep 14, 2019 8:27 am

If vanguard does it , why not TSP?
They should make it as easy as possible for investors to look at their returns .
Not everybody has the time (non retired folks) and not everybody enjoys spread sheets and math calculations

dbr
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Re: How to get 10 year cumulative return on TSP account

Post by dbr » Sat Sep 14, 2019 9:32 am

Seriously, as much as it is a good thing for people to have some math knowledge of return and compounding, issuing a textbook instead of just running the data is absurd.*

*I first learned how to compute internal rate of return for a portfolio from an excellent essay in the notes to my 401k plan. But the difference is that they computed the number and then provided a reference to how they do it rather than just sending a person to the reference.

**They also make the standard mistake of calling the result the geometric average of the annual returns when it is actually the compound annual growth rate (CAGR). See here https://en.wikipedia.org/wiki/Geometric_mean and here: https://en.wikipedia.org/wiki/Compound_ ... rowth_rate

jsprag
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Re: How to get 10 year cumulative return on TSP account

Post by jsprag » Sat Sep 14, 2019 1:30 pm

Jimsad wrote:
Fri Sep 13, 2019 5:46 pm
Hi .
On the TSP account , only one year performance return is reported .
We wanted to find out the 10 year cumulative return just like the way vanguard reports on their accounts .
When we called , the customer service said they do not report that . Is there a way to get this ?
My annual statements have 1, 3 and 5 year performance figures for the individual funds (G, F, C, S, I), all the lifecycle funds, and my personal time-weighted return over those same periods. They may not do 10 year, but they're calculating more than just annual.

If you're looking for 10 year performance on individual funds (not your personal account) then those are here.

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vineviz
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Re: How to get 10 year cumulative return on TSP account

Post by vineviz » Sat Sep 14, 2019 1:45 pm

dbr wrote:
Sat Sep 14, 2019 9:32 am
**They also make the standard mistake of calling the result the geometric average of the annual returns when it is actually the compound annual growth rate (CAGR). See here https://en.wikipedia.org/wiki/Geometric_mean and here: https://en.wikipedia.org/wiki/Compound_ ... rowth_rate
In this use case, geometric mean and CAGR are identical and interchangeable.

More generally, CAGR is equivalent to geometric mean in the absence of internal cash flows. In other words, CAGR is the time-weighted geometric mean.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

dbr
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Re: How to get 10 year cumulative return on TSP account

Post by dbr » Sun Sep 15, 2019 8:00 am

vineviz wrote:
Sat Sep 14, 2019 1:45 pm
dbr wrote:
Sat Sep 14, 2019 9:32 am
**They also make the standard mistake of calling the result the geometric average of the annual returns when it is actually the compound annual growth rate (CAGR). See here https://en.wikipedia.org/wiki/Geometric_mean and here: https://en.wikipedia.org/wiki/Compound_ ... rowth_rate
In this use case, geometric mean and CAGR are identical and interchangeable.

More generally, CAGR is equivalent to geometric mean in the absence of internal cash flows. In other words, CAGR is the time-weighted geometric mean.
No. See this article for the f-mean where f for the geometric mean is log(r) and f for the CAGR is log(1+r): https://en.wikipedia.org/wiki/Generaliz ... zed_f-mean or relationship with logarithms in https://en.wikipedia.org/wiki/Geometric_mean The funciton f for the arithmetic mean is the identity, for the harmonic mean is 1/r, for the quadratic mean is r^2 (used with risk assuming no correlation) and so on.

It is correct that there are the additional concepts of internal rate of return, dollar weighted vs time weighted, other kinds of weighted means, etc.

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