The article warns federal employees that the TSP's C Fund, which tracks the market-cap-weighted S&P 500, offers less diversification than it appears. The top 10 companies control about 39% of the index, heavily favoring tech giants like Apple and Nvidia, making returns vulnerable to their performance. This contrasts with equal-weighting, which balances all 500 companies and has historically outperformed by about 1% annually, though it's lagging recently due to mega-cap dominance. Key risks include reliance on past tech gains, sector disruptions, and amplified volatility. It advises diversifying across TSP funds, reassessing allocations, and consulting a certified financial planner for balanced retirement strategies, while including standard investment disclaimers.
Read more: https://www.govexec.com/pay-benefits/2025/10/when-500-companies-dont-equal-diversification-tsp-reality-check/409130/
