How to invest tsp funds in gold

## Investing TSP Funds in Gold: A Comprehensive Guide

### Introduction

The Thrift Savings Plan (TSP) is a retirement savings plan available to federal employees and members of the uniformed services. It offers a variety of investment options, including stocks, bonds, and mutual funds. Gold is not one of the options available within TSP, but there are ways to invest in gold through TSP. This guide will explain how to invest TSP funds in gold, including the potential benefits and drawbacks of doing so.

### Why Invest in Gold?

Gold is a precious metal that has been used as a store of value for centuries. It is often seen as a safe haven asset, meaning that its value tends to hold up or even increase during times of economic uncertainty. There are several reasons why investors might choose to add gold to their portfolio:

* **Inflation hedge:** Gold has historically outperformed inflation over the long term. This means that it can help protect the value of your savings from rising prices.
* **Diversification:** Gold has a low correlation to other asset classes, such as stocks and bonds. This means that it can help diversify your portfolio and reduce your overall risk.
* **Safe haven asset:** Gold is often seen as a safe haven asset, meaning that its value tends to hold up or even increase during times of economic uncertainty.

### How to Invest TSP Funds in Gold

There are two ways to invest TSP funds in gold:

1. **Through a mutual fund:** Several mutual funds invest primarily in gold. You can invest in these funds through TSP’s mutual fund window. Some of the most popular gold mutual funds include:
* SPDR Gold Shares (GLD)
* iShares Gold Trust (IAU)
* Aberdeen Standard Physical Gold Shares ETF (SGOL)
2. **Through a brokerage account:** You can also invest in gold through a brokerage account. This gives you more flexibility than investing through TSP, but it also comes with higher fees.

### Potential Benefits of Investing in Gold

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Investing TSP funds in gold can offer several potential benefits, including:

* **Diversification:** Gold has a low correlation to other asset classes, such as stocks and bonds. This means that it can help diversify your portfolio and reduce your overall risk.
* **Safe haven asset:** Gold is often seen as a safe haven asset, meaning that its value tends to hold up or even increase during times of economic uncertainty.
* **Inflation hedge:** Gold has historically outperformed inflation over the long term. This means that it can help protect the value of your savings from rising prices.

### Potential Drawbacks of Investing in Gold

Investing TSP funds in gold also comes with some potential drawbacks, including:

* **High fees:** Investing in gold through a brokerage account can come with high fees.
* **Liquidity:** Gold is not as liquid as some other investments, such as stocks and bonds. This means that it can be difficult to sell your gold quickly if you need to raise cash.
* **Volatility:** The price of gold can be volatile, which means that you could lose money if the price drops.

### Conclusion

Investing TSP funds in gold can be a good way to diversify your portfolio and reduce your overall risk. However, it is important to be aware of the potential benefits and drawbacks of doing so before you make a decision. If you are considering investing in gold, it is important to talk to a financial advisor to discuss your individual needs and goals.

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