The stock market continued its decline in July. The biggest loser for the month was the I fund which is down 3.72% for the month and down 14.11% for the year-to-date. The year-to-date loss makes the I fund the largest loser among any of the I funds for the year as well as for the month.
And, on the more positive side, the F fund has performed well for the year with a year to date return of 6.42%–the best of any of the TSP funds in 2008. For the month, the G fund had a positive return of 0.40%–the highest positive return of any of the funds.
Here are the results for the month.
TSP Fund Returns for July 2008
| Fund | G | F | C | S | I |
| July | 0.40% | -0.01% | -0.80% | -0.79% | -3.72% |
| YTD | 2.20% | 1.25% | -12.60% | -8.41% | -14.11% |
| 12 Month | 4.15% | 6.42% | -10.99% | -7.61% | -11.64% |
Lifecycle Fund Returns for July
| Fund | L Income | L2010 | L2020 | L2030 | L2040 |
| July | 0.00% | -0.23% | -0.82% | -1.07% | -1.31% |
| YTD | -0.67% | -2.81% | -6060% | -8.17% | -9.59% |
| 12 Month | 1.52% | -4.43% | -4.36% | -5.95% | -7.41% |
No doubt, many TSP investors are wondering how to proceed with their investments in the coming months. With the continuing uncertainty about oil prices, gas prices, subprime loans, housing prices and concern about the impact the election may have on future economic policies, it is likely that the market will continue to be volatile. The best approach is to try and avoid an emotional reaction to immediate events and to stick with your investment plan. Investors who decide to bail out of the stock funds may find that they have missed a sudden increase in prices if the market makes a quick turnaround.
Each market is different. One concern that some analysts have expressed is that consumers are spending less and that this trend will continue. If that occurs, the future performance of many companies will continue to be dismal and the stock market decline will not quickly abate. Another problem is that banks and lending companies are still feeling the effects of risky lending practices and it is possible there will be more bank failures–and a lack of confidence by consumers and investors–for the near future.
In short, no one really knows what to expect from stocks in the next several months other than significant moves up and down are likely to occur as the market responds to events.
Plan your retirement spending carefully. It may take awhile for the markets to work through the current pessimism.
