L Fund to G or F Fund


Q. With the looks of it, the economy has been doing better.  The “fiscal cliff” is concerning me. My wife and I both have about seven years and both put 10 percent into the L2040 Fund. I was thinking of moving both to a safer fund (G or F) for a while until a deal is in place and the economy is safe and stable. I was thinking of doing this to potentially avoid another year like 2008, or something like that if a deal is not made with the president and Congress. What are your thoughts of doing something like this for the short term to avoid any potential large losses and eventually putting the money back into the L2040 when the economy is more stable?

A. It’s speculative market timing and, therefore, I don’t like it. What’s safer than either the G or F Funds, alone, is a combination of all five funds at once. Without stocks, how are you going to hedge the risk of owning the G and/or F funds?


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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