Some TSP Investors “Up” in April; Stock Investors “Down”

Stock funds are down in April but still up substantially for the past year. The bond funds did well in April.

The TSP stock funds turned in a losing month for the second month in a row during April. These funds are now down for three out of the past four months (see the TSP corner for current and historical information on the TSP).

For April, the S fund is down 3.72%; the I fund is down 2.27% and the C fund is down 1.90%. For the past twelve months though, the I fund is still up 15%, the S fund is up 8.20% and the C fund is up 6.35%.

The bond funds fared better in April with the F fund up 1.35% and the G fund up 0.37%. For the past twelve months, the F fund is up 5.21% and the G fund is up 4.53%.

From looking at the April figures, readers with their TSP money in stock funds will not be too happy. But, if you are looking for good news, here is comparative information that may make you feel better.

The Wall Street Journal published its benchmark index this week. In other words, it allows an investor to see how a particular type of stock fund compared to the index. Using this measure, TSP investors did pretty well.

For small-cap stocks (similar to the S fund), the benchmark index (Russell 2000) was off 6.44% as compared to the 3.72% loss of the TSP S fund. For large company stocks, the index (S&P 500) was off 3.05% for April compared to a loss of 1.90% for the TSP C fund. And for international stocks (MSCI EAFE), the index was off 3.01%, compared to a loss of 2.27% for the TSP’s I fund.

As we noted in a recent article, the stock market has been very rocky lately. Is the bull market over?

The current bull market started in October 2002 so it is now 2.5 years old. The median point of a bull market is 2.6 years. That means that an equal number of bull markets are longer or shorter. In effect, some investors are getting concerned that there may be a greater chance of stocks declining in the near future because of the length of time for the current market.

There is some good news though. The economy is still growing at a rate of about 3% and recent earnings reports from larger companies have been very good. That could mean a longer positive run for stocks.

While some investors claim to be able to predict the future of the stock market, most of us do not have that confidence or ability. There are services available that will sell you their predictions on the future of the market so you can invest your TSP funds to take advantage of the pending moves up or down.

For the rest of us, this is still a good time to review your investment in the TSP. You may find that you have a much higher percentage of your investment in the S or I funds than you would like because of recent excellent performance of these funds. If that is the case, you may want to move some of this money into the other funds to have more diversification for the near future. (For curious readers, see "How Should You Diversify Your TSP Portfolio?")

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