Q. When you lose money in the TSP C,S or I Funds (during a correction or crash), is it only on paper and only temporary until the market rises again at some point? The only time you really lose money is when you sell in a down market and “lock” in your losses, correct?
A. I’m not sure what you’re trying get at, here, but this sounds like a gambler’s rationalization. A loss accrues when the market value of your asset is less than your basis in that asset. You realize a loss when you sell the asset for less than your basis. There is no guarantee that an accrued loss will be temporary. An accrued loss is a loss for as long as it persists, and “locking in” a loss may actually be freeing up your capital for a better use.
