Originally Posted by
block30
Ok, so I am looking at TSP information, and it looks like TSP has a really low expense ratio (.027%). I am looking at my American Funds, of which I have five different funds, and their expenses according to MorningStar range from a touch over 1.0% to .8%. My funds also have a load of 5.75. Is the difference in load and expense why TSP comes highly recommended?
Yup, that's why I wouldn't touch American Funds with a 10 foot pole (or any loaded fund). You're paying American Fund salesmen 5.75% of your money, up front, for the "privilege" of investing in their funds. Then you're paying another 1/2 to 3/4 percent in higher expenses EVERY YEAR, year after year, whether the fund does well or not, over what you would pay in the TSP. That's a lot of drag to overcome. I'd ditch the American Funds ASAP if they were mine.