More importantly, TSP Pilot's performance occurred while accepting substantially LESS MARKET RISK. That reduction in risk allows TSP Pilot investors to sleep better at night while still taking fully optimized stock fund positions.

TSP Pilot's outstanding performance is based on professional fund timing and fund selection principles and techniques--the two hallmarks of TSP investment success.

How simple is it? Virtually any Thrift Savings Plan account holder can use TSP Pilot to improve investment results. No investing experience is necessary.

TSP Pilot provides specific recommendations for both a Standard and an Aggressive Portfolio to better match your individual risk profile.

TSP Pilot's advisories will tell you exactly which allocation and fund balance percentages to plug into which funds on the TSP website for your account completely simplifying the update process for you.

TABLE II

Throughout the entire 19 year history of the database, the TSP Pilot Portfolios would have dramatically lowered the exposure of your TSP account to downside market risk. The TSP Pilot Standard Portfolio would have exposed you to about the same low level of volatility, and therefore peace of mind, as the TSP Income L Fund portfolio invested mainly in bond funds over the entire 19 year history. However, the average 19 year performance would have been nearly three times greater for the TSP Pilot Portfolio than for the TSP Income L Fund--greater reward with limited risk.

The most recent five year history shows a continuation of TSP Pilot's performance dominance over all of the TSP funds and portfolios.

Largely because of TSP Pilot's limited downside risk exposure during the long bear market of 2000-2003, the TSP Pilot Portfolio produced almost DOUBLE the annual return of the TSP C Fund, the S Fund and even the new, aggressive 2040 L Fund which would have been invested 85% in TSP stock funds (Table II)!

In fact, over the 19 year history, the Ulcer Performance Index (UPI), which measures risk adjusted performance, was nearly 4-7 times greater for the TSP Pilot portfolio than for any of the new TSP L Funds. The UPI is perhaps the most important metric for evaluating true investment performance since because it measures total return in relation to the market risk accepted by a portfolio.

The truest professional measure of market risk, the Ulcer Index (UI), was even substantially lower for the TSP Pilot Portfolio then it was for the low volatility/low return TSP 2010 L Fund (2.1 vs. 4.4 --a substantial percentage difference) while the total return for the TSP Pilot Portfolio was twice as large as the TSP 2010 L Fund!

In other words the low UI market risk of the TSP Pilot Portfolio gives you the same comfort level of the TSP 2010 L Fund invested largely in the TSP G and F bond funds!

Essentially, TSP Pilot drastically improves the slope of the entire risk/reward horizon rather than simply shifting it to a different level.

Typically, TSP Pilot's effective fund timing puts TSP accounts largely in the stock funds about 60% of the time when the markets are in up trends while moving clients to the bond funds for the remaining 40% of the time when the markets are soft or falling. In order to minimize trades, the systems are designed to take advantage of intermediate to long-term trends. TSP Pilot systems are designed to switch back and forth completely between the TSP stock and bond funds only 2 to 4 times each year.

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