A Decision Support Tool for Thrift Savings Plan Investors

<p>The Thrift Savings Plan is the defined contribution retirement plan for federal government employees. It is one of the largest retirement plans in the United States. The plan offers five different investment options: two funds concentrate on government securities and corporate bonds two funds span the United States stock market and one fund focuses on international stocks. These funds give investors the opportunity to diversify among a wide range of securities. This thesis examines the funds offered by the plan and creates a portfolio selection tool that uses investor inputs. The tool uses three mathematical models: optimization based on Markowitz's (1952) Modern Portfolio Theory; simulation based on the combination of optimization results and investor profiles; and selection based on the simulation results and investor preferences. Results are presented for four investors. Other investors can use these results to gain insight but the greatest benefit is derived from individual implementation. The tool requires only a few user inputs and it can be operated without any external assistance. The research has further found that one investment option should not be part of any portfolio and some portfolios can be risky to individuals for differing reasons.</p><p>This work has been selected by scholars as being culturally important and is part of the knowledge base of civilization as we know it. This work was reproduced from the original artifact and remains as true to the original work as possible. Therefore you will see the original copyright references library stamps (as most of these works have been housed in our most important libraries around the world) and other notations in the work.</p><p>This work is in the public domain in the United States of America and possibly other nations. Within the United States you may freely copy and distribute this work as no entity (individual or corporate) has a copyright on the body of the work.</p><p>As a reproduction of a historical artifact this work may contain missing or blurred pages poor pictures errant marks etc. Scholars believe and we concur that this work is important enough to be preserved reproduced and made generally available to the public. We appreciate your support of the preservation process and thank you for being an important part of keeping this knowledge alive and relevant.</p><br>