After last month’s trouncing of stock returns in the TSP funds (and the overall market), Thrift Savings Plan participants will feel better about their rate of return for August.
The S fund, which is down 6.42% for the year and 6.89% over a 12-month period, went up 2.17% for the month. The C fund also went up 1.46% for the month (although it is down 11.33% for the year). The I fund took another drubbing though as foreign stocks continue to struggle. It went down 4.16% for the month and it down 17.68A% for the year so far.
The best performing fund for the year-to-date is the G fund w;hich is up 2.54%. It was up 0.33% for August.
Here are the rates of return for each of the underlying TSP funds:
So what does the future hold for stocks?
The Wall Street Journal ran an article after the August returns were in that concluded many analysts think the hope for a market recovery in the remaining months of the year are dim. The reasons are fairly easy to discern. Home prices may not have bottomed out yet; there are still concerns about the strength of global financial markets; banks are still tightening their standards for giving out loans; and job losses are likely to continue for the next several months.
Events could turn the market around but many professional analysts are skeptical and think that the current downturn will have to continue before conditions become favorable for a significant turnaround in stock prices.
Of course, the markets are unpredictable, especially for short term performance, but there does not appear to be a basis for a sudden and sustained surge in stock prices in the near future. But, as the returns for August show, there is the possibility that the funds will start working their way back into positive territory over the next several months–even if the returns are slower than most TSP participants would like them to be.