When you glance at the Thrift Savings Plan (TSP) year-to-date returns on the front page of the FedSmith site today, it may make you feel better. Because, with the exception of the F fund, all of the TSP funds are up for the year. Unfortunately, the returns that are displayed are only for one day of trading in the stock market.
The reality is that the Dow Jones Industrial Average was down 33.8% in 2008. That is the worst year of returns since 1931. The S&P 500 (the index used for the TSP’s C fund) ended down 38.5% for 2008. The result is the worst year the C fund has experienced since the Thrift Savings Plan was initiated.
For those readers looking for better news, December was an "up" month for all of the TSP funds. The I fund actually had a good month, moving up 7.66% in December although still down 42.43% for the year. That was the worst performance for any of the TSP funds. In an awful year of returns for investors, the F fund was the brightest spot: it finished up 5.45% for the year–ahead of the G fund which returned 3.75% for the past twelve months.
After five straight years of positive returns for all of the TSP funds, 2008 was certainly a disappointment.
Here are the results for the underlying TSP funds for 2008:
The results were somewhat better for the lifecycle funds as the funds are all balanced between the stock funds and the more conservative G and F funds. Here are the 2008 results for the lifecycle funds:
The December returns did soften the blow somewhat. As noted above, all of the TSP funds had a positive return for the last month of the year. Here are the illustrated results: