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January TSP Funds Off to a Great Start for the Year

by Ralph Smith |

Since 1929, the S&P 500 has averaged a 13% gain when the index went up in January, according to a recent article in the Wall Street Journal. Conversely, when the index falls in January, it has averaged a 3.6% decline for the entire year. The C fund in the Thrift Savings Plan is based on the S&P 500 index.

Because the C fund is based on the broad S&P 500 index, the Thrift Savings Plan has had similar results to those identified in the Journal article. For example, the last year in which the C fund declined for the year was in 2008. In that year, the C fund declined 36.99%. It went down 5.98% in January 2008.  The C fund went down for three straight years from 2000 – 2002. In January 2000, the C fund declined 5.03% and was down 9.14% for the year. In January 2001, the C fund was up 2.55% but declined 11.94% for the year. In January 2002, the C fund declined 1.47% and lost 22.05% for the year.

With that background, how did your TSP stock investments fare this month? The C fund was up 5.18% which may bode well for your stock investments in 2013.

All of the TSP stock funds were up in January. The S fund increased 6.96%, beating out all of the other funds.  The only fund losing money in January was the F fund which was down 0.56%.

Of course, there is no guarantee that economic and political events will cooperate and there is plenty of uncertainty that can derail stock prices later this year.

Here is how all of the TSP funds performed in January:

G Fund

F Fund

C Fund

S Fund

I Fund

Month

0.13%

-0.56%

5.18%

6.96%

4.45%

YTD

0.13%

-0.56%

5.18%

6.96%

4.45%

12 Month

1.46%

2.80%

16.83%

17.87%

17.60%

L Income

L 2020

L 2030

L 2040

L 2050

Month

1.10%

2.83%

3.56%

4.11%

4.63%

YTD

1.10%

2.83%

3.56%

4.11%

4.63%

12 Month

4.70%

10.21%

12.39%

14.01%

15.59%

You can get additional TSP return data at TSPDataCenter.com.

Average TSP Balance

In a recent popular article on our site, the author cited different statistics for the average TSP balance. The FedSmith balance figures are obtained from the TSP and here are the latest TSP balances as of December 31, 2012 for both the total balances and the Roth TSP balances:

FERS $90,265 $1,479 (Roth)
CSRS $90,558 $2,648 (Roth)
Uniformed Services $14,039 $553 (Roth)

TSP Transfers in December

Trying to time the market is often described as “difficult” or “impossible” to do with any consistency. Of course, people may have a lot of different reasons for moving their money, especially if they were retiring at the end of the year.

In December 2012, TSP investors transferred more than $1.6 billion from the C fund and moved more than $3.1 billion into the G fund. Investors also removed substantial amounts from the S, I and L funds. In hindsight, had investors left this money in the stock funds, they would now have more money in their investments since the returns were very good in January.

Your Investments in 2013

No one knows with any certainty if the rest of 2013 will provide good returns or if the economic headwinds will put a damper on investor enthusiasm. But, as we recently noted in an article on the Thrift Savings Plan, federal employees have a leg up on other investors with low expenses and better rates of return that most investors are likely to have.

Best of luck to all of our readers in formulating your investment strategy for the remainder of the year.

© 2014 FedSmith Inc. All rights reserved. This copyrighted article may not be reproduced without express written consent of FedSmith Inc.

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About the Author

Photo of Ralph Smith

Ralph Smith

Ralph Smith is one of the founders of FedSmith.com. He writes in a blunt, entertaining style with a viewpoint that reflects an in-depth knowledge of federal HR issues.

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Daily TSP Rates

April 17, 2014

Fund Last Change YTD
L Income 16.9750 +0.0069 +0.94%
L 2020 22.0406 +0.0303 +1.12%
L 2030 23.7376 +0.0425 +1.19%
L 2040 25.1366 +0.0530 +1.22%
L 2050 14.2365 +0.0355 +1.23%
G Fund 14.3859 +0.0010 +0.69%
F Fund 16.1278 -0.0505 +2.45%
C Fund 24.2371 +0.0345 +1.52%
S Fund 33.7924 +0.1332 +0.36%
I Fund 25.7933 +0.1257 +0.90%
More TSP Rates | Track Your Investments