TSP Funds All Up in September

TSP investors all have a reason for optimism as every TSP fund went up in September. Moreover, all TSP funds have solid gains for the past 12 months as well.

If you have been reading news about the stock market recently, you may have been thinking about the great gains for your TSP fund as you heard headlines about the stock market reaching an all-time high. You have at least some basis for optimism. Not a single TSP fund lost money in September and all TSP funds have significant gains over the past 12 months.

Keep in mind that the headlines you have probably been reading are usually referring to the Dow Jones Industrial Average. That is a different average than the one used for the TSP funds although there is often a correlation.

In any event, your TSP funds have been doing well. Here are the results for September.

Fund G F C S I
September Return 0.35% 0.82% 2.58% 0.88% 0.15%
12 Month Return 4.90% 3.68% 10.78% 8.77% 19.23%

None of the funds lost money in the month of September and the C fund finished ahead of the other TSP funds – reflecting the uptick in stocks for the month. The 2.58% return for September also moved the C fund up into second place in overall returns for the past twelve months with a return of 10.78% for that time frame.

The International Stock fund (I fund) barely nudged up for the month but it is still way ahead of all others for the past 12 months with a return of 19.23%.

And what about the lifecycle funds? They have not fared badly in the past month or the past 12 months either. Here are the latest returns for these funds:

Fund L2040 L2030 L2020 L2010 L Income
September Return 1.41% 1.33% 1.17% 1.01% 0.73%
12 Month Return 11.52% 10.72% 10.07% 8.72% 6.50%

The Dow Jones average hit a new high this week. Even before that milestone was reached, at the end of September it was up 9% for the year and 4.7% in the quarter. The Standard and Poor’s 500 Index, on which the TSP C fund is based, is up 7% for the year and 5.2% for the quarter. It was still almost 200 points below its all-time high at the end of September. The highest point for this index was reached back in March of 2000.

Here is an indicator of future stock market performance that will please some readers. Stocks often go up after midterm elections, which occur two years into each presidential term. According to the Wall Street Journal, since 1950, the average return for the Dow Jones Industrial Average from the November of a midterm-election year through the following October has been 18.6%.

So what does that mean for your investment future?

There is the possibility of substantial future gains in your stock investments but absolutely no guarantees. Keep in mind that your retirement future may depend on the returns from your TSP funds. With that in mind, diversification between the various stock market funds is a good idea for most investors—unless you are confident you can outwit the stock market and are able to determine in advance which segment of the market is apt to provide the best return.

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