If you are invested in the Thrift Savings Plan Common Stock Fund (the “C” Fund), you may watch the stock market occasionally to see how your money is performing. If you watch it too closely, you may be getting an ulcer as your retirement dreams may be slipping further into the sunset than you thought possible.
The C Fund is based on the Standard and Poor’s 500 index (S&P) and the C Fund returns closely track that index. So, since the month of September is over and the third quarter of the year is over, how is your money doing?
Not very good. At the end of August, the C Fund was off 17.98%. It hasn’t gotten better. For the past twelve months, the S&P 500 is now down 20.52%.
To put this into perspective for you, this has been the worst six-month period for the S&P 500 since 1974. And for the past quarter, the S&P is down 17.6%. (In 1987, it was down 23.3% in the fourth quarter of that year). The S&P is now at a five-year low. And, during the current bear market, the S&P has lost about half of its value.
So what does this mean to you and your investment in the C Fund? While we will have the official figures in a few days, you won’t like the results. Some analysts see the end of the bear market in sight and a return to positive returns in the next few months. While no one really knows what will happen, especially in the short run with the possibility of war in the Middle East, Congressional elections looming, politicians playing to their constituent base before the elections and the Federal budget stalled in the morass. But, in the past, the market has always come back and rewarded those who didn’t bail out at the bottom of the market.
We aren’t going to make any predictions. But in a few more months, we will tell you if the past was prologue to the future once again.