C Fund Tanking in January–So Far

The stock market has not been performing well for investors. For the first three weeks of January, the C fund has followed this trend as the S&P 500 Index is down about 4% for the month.

As most readers know, you can’t track the returns for your TSP funds until the official figures are released by the Federal Retirement Thrift Investment Board. These are normally released the first week of the month.

But, if you have been reading about the stock market the past several weeks, you may be concerned about your investment in the common stock fund of the TSP (C fund). How has it done so far in January?

Looking at the bright side, it may not be as bad as you think it is. If you have been following the business section of your newspaper, you know the investment climate has not been good for stocks the past couple of weeks. Fortunately, the stock market took a solid leap early in January before coming to an abrupt halt and then fallling.

So, as of the close of the stock market yesterday (January 27, 2003), your C fund is down about 4% for the month (this is based on the performance of the S&P 500 index which is the basis for the C Fund). This loss is on top of the 22.05% loss for the 12 month period ending in December. Obviously that may change by January 31 so the final January figures released by the Board will be different.

Most analysts agree that until the Iraq situation is resolved, the stock market is not going to stabilize. While there will be spikes and drops during the interim, there is not likely to be any clear direction. For the past few days, the direction has been clear though–and it’s all down.

In the meantime, don’t spend your retirement funds yet if you can avoid it. If you are planning on retiring in the near future, and you have heavily invested in the C fund, you have to be unnerved about the performance of your fund for the past three years. If the past is any predictor of the future, the stock market will go up again. It’s just that no one knows when that will be.

On a brighter note, when the market does turn up again, your recurring investment at the current levels should provide you with a good rate of return. If you are young enough, it’s not anything to worry about. But, if you are retired or planning on retiring, keep on the good side of your employer. You may want to stay in that job longer than you planned.

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