It wasn’t very long ago that investors in stocks were feeling morose, depressed or, even for the most optimistic souls, at least a little broke. Stocks couldn’t get any traction and one bad month followed another.
As the stock bubble of the late 1990’s popped, the stranglehold of the bear market drove stocks lower. The longer it dragged on, the more investors cashed in their stocks and headed for the perceived safety of the G and F funds. Investors were wondering if and when the free fall in stock prices would end as we watched the economy heading into recession. The C fund was down for three straight years with back-to-back yearly losses of 9.14, 11.94 and 22.05. The S fund was down over 18% in 2002. Retirement seemed further away than ever for many TSP investors.
But, as usually happens, the market hit bottom (as we know with perfect hindsight) and those that kept putting more money into stocks each month are now reaping the benefits of that economic decision. While the wisdom of this seems obvious now, for many investors that was a hard decision to make as it seemed that new money put into the TSP stock funds kept decreasing in value.
But now, As the economy continues to show more signs of an economic recovery, stocks continue to soar. S fund investors are still ahead of the other funds with a return of 38.27% for the past twelve months. The return for October alone was 7.65%.
The I fund is a close second with a 6.06% return for October and a return for the past twelve months of 26.66%. The C fund was also kind to investors last month. It had a monthly return of 5.68% and a return over the past twelve months of 20.64%.
As is often the case when stocks are doing well, the F fund did not do as well. It actually lost 1.00% for October but still has a return over the past twelve months of 4.89%.
And, not surprisingly, the G fund turned in a return of 0.30% with a positive return over the past twelve months of 4.05%.
And, to make the good news even better, the stock market continued to trend upward early in November. Check out the daily and the most recent returns for your TSP funds on the FedSmith.com home page each business day.