I Fund is Big Winner for TSP Funds in September

The I fund is the largest gainer among TSP stocks for September. The F fund goes down though.

Many investors are hoping for an end of the year rally in stocks—especially those readers who may be contemplating retirement in the near future and would like to see their TSP investment shoot up before they give up the security of a full-time federal job.

So far, there has not been a big run in stocks though. While earnings have been doing well for many companies, other problems have created a large barrier. Rising oil prices, an increase in short-term interest rates and hurricane damage on the Gulf Coast and the fear of uncontrolled spending by the federal government as the combined cost of the war in Iraq and billions for the Gulf Coast have certainly created a drag on stocks.

Having said that, TSP investors will not be in for any big surprises when reviewing their TSP returns for the month of September.

  • The I fund finished ahead of all other TSP funds coming in with a gain of 3.68% for the month. The I fund also leads all other funds for the past twelve months with a significant gain of 25.74%.
  • The C fund managed a small gain for September moving up 0.84%. It is up 12.27% for the past twelve months.
  • Small company stocks (the S fund) also had a positive return coming in third for the month with a gain of 0.83%. The S fund has also been kind to investors over the past twelve months with a gain of 22.11% during that period.
  • Of course, the G fund continued along with a gain of 0.36%. The G fund is up 4.35% for the past twelve months.
  • The loser for the past month—and for the past year—was the F fund. It was down 1.03% for September and has a return of only 2.81% for the past year.

There is some optimism for a gain before the year is out. Some analysts expect that oil prices will stabilize and there is hope that the Federal Reserve may be through raising interest rates for the short term. October has sometimes been a significant month for stocks. It is the month when market blowups have occurred — notably the crashes of 1929 and 1987.

But October is generally one of the year’s best months. Typically, it is the month when stocks begin a rally that, on average, makes late fall and early winter the best time of the year for the stock market.

Let’s all hope for no more major hurricanes hitting the United States this year!

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