TSP Stock Investors Do Well in July–Bond Investors Lose

Stock funds up again in July

As often happens when the American economy starts to rebound, small companies do well. The Thrift Savings Plan options reflect this economic reality with the small company fund (the S Fund) returning 4.60% for investors in July. Even better for these investors, the fund has had a positive return rate of 21.13% for the past twelve months.

That is better by far than any other fund although C fund investors won’t be too disappointed with their return either. Investors in the common stock fund saw a positive return of 1.78% and they are now up 10.55% for the past twelve months.

The international stock fund (the I Fund) returned 2.35% for July. It is up 6.8% for the past twelve months.

The big loser this month was the F fund with a negative return rate of 3.41%. When stocks start going up, bond funds often do not do well. The hard economic reality of higher interest rates and higher rates of return on stocks has hit the F fund just as it has most private sector bond funds.

But, even with the loss in July, the F fund is still not doing too badly. It is up 5.29% for the past twelve months.

The ever reliable G fund gave investors a .30% return for July and it is now up 4.06% for the past twelve months.

As we have frequently noted in these articles, TSP investors will do well to diversify their investments. Timing the markets is difficult and spreading out your investments between the several stock funds and the bond funds is likely to serve you best throughout your career.

For example, a number of investors moved money from stock funds during the past year when the C fund was losing money month after month. Those investors that bailed out in the last half of 2002 and put their money into the F fund (which had been doing very well during the time the C fund was losing money), probably lost some of their investment in the C fund by selling at a low point. And, for some investors, they saw the F fund start declining shortly after putting their money into that fund. In other words, these folks lost on both ends of the trade–not a good way to ensure a happy retirement.

For more information on your retirement, check out the links on the left hand side of the page.

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