TSP Stock Funds Down in May–Up Substantially Over 12 Months

By on June 2, 2011 in Current Events with 6 Comments

The stock funds in the Thrift Savings Plan ended a run of months with positive returns in May 2011.

The C and S funds have not had a down month since August 2010. But, in May, the C fund dropped 1.13% and the S fund lost 1.27%. The I fund, which has been more volatile than the other funds, went down 2.90%.

On a more positive note, the C fund is still up 7.81% so far this year and the S fund is up 9.76% so far in 2011. Moreover, for the past twelve months, the C fund is up 25.92% and the S fund is up 32.93%. During the same time, the I fund is up 31.46%.

Big Jump in 12 Month Returns 

Part of the reason for the big jump in the 12 month figures is that the data from May 2010 was removed from the calculations. In May 2010 the C fund was down almost 8% and the S fund was down about 7.5%. (See the Historical Monthly TSP Returns

Investors in the bond funds of the Thrift Savings Plan saw positive returns in May. The G fund was up 0.25% and the F fund gained 1.31%. So far in 2011, stock investors are still way ahead of these funds as the G fund is up 1.22% for the year and the F fund is up 3.06% in 2011. 

This chart shows how your investments in the underlying TSP funds have performed for the past twelve months and for May 2011.

As you can see, those that took more risk with their future retirement funds by investing in stocks have fared much better than those that took the safer route of investing in the G and F funds. Of course, those that put their money into the bond funds may have been sleeping better without checking the daily stock returns worrying about a major drop in the stock market such as the one that occurred on June 1, 2011 or the “flash crash” that occurred in May 6, 2010 when the stock market dropped by more than 1000 points in a short time (it ended up down 3.6% in one day). (See Checked Your TSP Funds? What Happened on May 6?)

The stock market took a big drop on June 1 of this year and undoubtedly makes some TSP investors nervous but the drop was not comparable to the “flash crash” that occurred in May 2010.

TSP Investor Activity in April 2011 

TSP investors may have been feeling better about their investments in April but trying to predict short term market moves are very difficult. About $371 million was withdrawn from the G fund and another $181 million was withdrawn from the F fund in April 2011. But the money did not go into the C fund as $248 million was taken out of this fund.

Instead, investors poured $522 million into the S fund, another $10 million into the I fund and transferred another $268 million into the L funds. 

L Fund Activity

The number of participants in the lifecycle funds is continuing to go up. There are now about 528,000 TSP investors who are in FERS with money in the lifecycle funds. There are about 60,000 TSP investors who are in CSRS with money in the lifecycle funds. At the end of April 2010, there were 694,763 TSP investors with money in the lifecycle funds and at the end of April 2011, this figure was up to 779,089.

Unfortunately, all of the lifecycle funds were down in May. Here are the results for each of these funds:  

Economic Uncertainty 

We know that June of this year is off to a bad start with all of the funds going down substantially on the first day of the new month. We also know that June of 2010 was not a good month for the TSP stock funds with losses in all of the TSP stock funds. There is certainly plenty of pessimism in the markets at the moment with the economy sputtering, very little hiring as a result of several factors including lack of knowledge about strength of the economy, the huge federal debt, instability in Europe and the impact of changes to the health care system on small businesses in the United States.

Here is one example of extreme pessimism. One stock market analyst commented this week: “Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything. We’re on the verge of a great, great depression. The [Federal Reserve] knows it.”

Keep in mind that stock market analysts cannot predict the future of the stock market with significant accuracy either and, with national elections coming up, the government tries hard to have a growing economy and favorable stock market news so that people will vote for the incumbent party (and the hits to the economy and the stock market often occur the year after the election).

But not every analyst is pessimistic. One optimist on the other end of the psychological spectrum predicts a major gain in stocks over the next few months betting that the government will be able to create a situation in which stocks have a big run. 

Good luck. Here’s hoping your investments for your future retirement income show a strong return in the remainder of 2011! 

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.


About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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  1. EarlyOut says:

    I wonder if all these people who are clamoring about the stock market will ride out the next bubble crash?  We had the dot-com,sub-prime, and perhaps next; the stimulus crash. Good luck, but I wouldn’t put all my eggs in the same basket.

  2. New_Mexico87122 says:

    i gradually moved out of stocks and into bonds in 2007. then in 2009 i gradually moved into stocks. The results. Since 2008 im up 26.93% and the S&P is DOWN .63%. (That also includes divedends) I do what the pension funds and the insurance companys do. It’s called. DYNAMIC INVESTING.

    • Bill T. says:

      Apparently you recognized that that bubble market was ripe for a correction, good eye. I was planning to reduce my shares in the stock funds but was behind the curve, did ok anyway, you probably did better. It’s not feasible to time the market on a regular basis but when it becomes seriously too high or too low it’s tiome to re-evaluate your balance. You don’t have to catch it at the very top or extreme low, close works.

  3. Gnatman says:

    There is always market uncertainty but look at a website where there are charts of: the consensus future earnings by quarter for the S&P 500; relative strength of differing industries; comparison of commodity prices, bond yields, etc.

    Dr Ed Yardeni is one of the leading economists in the country, he has a free Blog where the charts are displayed.

  4. Mcflydaddy says:

    I Agree with Bill T.  I left my stocks where they were through the crash, and continued to buy shares while they were less expensive.  I have reaped the benefits, cost value averaging worked for me.

  5. Bill T. says:

    My TSP is well to the positive (net and gross), compared to pre-crisis levels. The pundits all were saying I couldn’t hope to be even back to equity for at least another 3 years. But then, I didn’t panic and dump my C, S and I shares in the spring of 2009, like many I know of did. Instead I put all my money into the stock funds, figuring either they would come back or we were all hosed anyway. I’m hoping we’ll have another short-term panic so I can buy more stock share at discount.