In the federal TSP program, one reason such funds were introduced was that many investors tended to sell stock holdings during down markets and not move the money back into those holdings until after a recovery was well under way—selling low and buying high, the opposite of desired investor behavior.
The TSP lifecycle L fund appropriate for the person’s age has been the default investment for newly hired federal employees for some 20 years and while they may change at any time, in practice many don’t. Among account holders, 40 percent now have all of their money in one or more L funds and another 15 percent have at least some of their money in one or more of the funds.
