TSP C Fund Down for 7 of 9 Months But October is Looking Good

With the C Fund down more than 20% in the past twelve months, fund investors are looking for a respite. They may get one in October if the stock trend continues for the last several days of October.

Your C Fund investment has, as you may have noticed, not been good this year. In fact, it has been terrible. The C fund is down 20.5% through September. For those of you who are retired or planning to retire in the near future, the financial impact of this is substantial.

If it is any consolation, you are far from being alone; private sector investors are not doing any better. We are now going through the worst bear market since the 1930’s as a result of the spectacular bubble in stocks in the late 1990’s.

There may be some good news coming your way this month though. Stocks have rebounded in the past several weeks and the S&P 500 index has had a good month. This is significant because your C Fund in the government’s Thrift Savings Plan is based on the S&P 500 index.

The figures for the monthly results won’t be released for a couple of weeks. No one is sure why but October is often a month when bear markets come to an end and, possibly, we will look back on October 2002 as the end of one of the most brutal bear markets of the past century.

While the month is not over, your investment in the C Fund is up about 9.5% for the month of October as of the end of last week. There could be a lot of changes in this figure in the next several days as there may be another discouraging reading on consumer sentiment coming out this week. The Commerce Department also releases its first estimate of third-quarter growth this coming week.

Both of these reports could have an impact on how stocks do in the last few days of the month. But, with the C Fund being down more than 20% in the past twelve months and a negative rate of return for 7 of the past nine months, TSP investors are certainly due for a bit of good news.

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. Follow Ralph on Twitter: @RalphSmith47