Many readers have been following the stock market ups and downs of the past few weeks. In recent days and weeks, the emphasis has certainly been on the "down" part as concerns about the housing market and housing loans are rippling through the financial sector.
But, with all of the headlines about the stock market, how has this impacted your TSP funds.
As you might expect, all of the stock funds are down for the month of July. This is the second month in a row in which the TSP stock funds have been down.
The biggest loser for the month: the small company fund. The TSP’s S fund dropped 4.57% last month. This fund is still up 4.58% for the year and 17.27% for the past 12 months. Further drops are certainly possible as larger company stocks tend to do better later in an economic cycle for a variety of reasons.
The C fund is also down, dropping 3.10% in July. It’s longer term returns are not as good as the S fund but it is up 3.63% for the year-to-date and up 16.14% for the past 12 months.
The I fund dropped a little less than the other stock funds. It is down 2.39% for July and has a year-to-date return of 8.33% and a 12 month return of 22.93%.
Here is a quick summary of how the results shape up for last month.
| Fund | G | F | C | S | I |
| July Return | 0.50% | 0.80% | (3.10%) | (4.57%) | (2.39%) |
| 12-Month Return | 4.97% | 5.68% | 16.14% | 17.27% | 22.93% |
The lifecycle funds are down across the board for July. As you would expect when the stock market goes down, the more aggessive funds will be the bigger losers and that is the case for July. Moreover, for the third time since the inception of the lifecycle funds, the L Income fund also had a small loss for the month.
Here are the lifecycle fund returns:
| Fund | L Income | L 2010 | L 2020 | L 2030 | L 2040 |
| July Return | (0.23% | (0.92%) | (1.75%) | (2.13%) | (2.52%) |
| 12-Month Return | 7.59% | 10.71% | 13.47% | 14.86% | 16.33% |
No doubt, some readers who are retired or rapidly approaching their retirement date will look at the returns for the past month and be inclined to switch all or most of their TSP funds into the G fund. It is certainly safer as the July returns indicate. The G fund is one of two funds that did not have a negative return. But, before you make the transfer, be sure to consider the possibility of much lower returns over time that you are likely to receive with the G fund. If you are planning on being retired for 25 or 35 years, a lower return will make a big difference in your financial security.
So, while the July returns are not positive, readers may want to look at a broader perspective of how their investments have done over time.
