TSP Stock Funds Zooming Up in March

Investors in the Thrift Savings Plan (TSP) stock funds are understandably discouraged. Investors have been fleeing to the safety of the G fund. When did the C fund last return more than 10% in a month? It has been almost 18 years. But here is good news: The March returns (so far) are very good for all of the stock funds and are now close to setting new records for the biggest monthly returns for these funds.

Thrift Savings Plan investors are discouraged. The reason isn’t surprising. They have been losing money in their stock funds on a continual basis.

Dismal Returns in TSP Stock Funds

The C fund lost almost 37% in 2008. The S fund did even worse. It lost more than 38%. The I fund was down more than 42%.

With returns like this, how much more could these funds go down?

No one liked the answer. The I fund dropped almost 12% in January. In February it lost another 10%. The S and C funds kept on losing money as well. The TSP investors nearing retirement, especially those in the FERS system, were looking at a later retirement than they had planned or later than they wanted to retire–not out of choice but, for some, out of financial necessity.

With articles like TSP Funds Reflect Worst Stock Returns for January in 113 Years, it is a relief to have the opportunity to finally point out some good news, the returns for these funds for the month of March are looking much better.

TSP Funds are Jumping Back in March

We still have a few days to go in the month of March. But, for those who may have been afraid to look at the TSP returns after being burned to many times, take a look at these numbers.

In looking at the closing daily rate for the C fund as of February 27, 2009 and at the closing daily rate for the C fund as of March 24, 2009, TSP investors have a return so far this month of almost 10%. S fund investors have a return of about 8% and I fund investors have a return of about 10%.

As the month of March is not yet over, these figures could change dramatically up or down. In fact, as this is being written, stock prices are up again for the day and these figures for the March monthly returns may be higher by the time the stock market closes today.

Will March Set New Records for TSP Stock Fund Returns?

To put this in perspective, when was the last time the C fund returned 10% or more in a month?

Do you recall when Sonny Bono was elected to Congress or Marion Barry was elected as mayor of Washington, DC or a fired US Postal Service employee went on a killing rampage killing four people and wounding five before committing suicide?

That was in December 1991. The C fund returned more than 11% that month.

What about in the bull market of the 1990’s? In October of 1998, the C fund returned 8.19%. In November 2001,  it returned 7.62%.

In other words, there is a good possibility that the C fund will finally provide TSP investors with a hefty return for an entire month. It may even set a new record for the highest monthly return it has ever had for TSP investors.

The March 2009 returns are not an official tally from the TSP and the final monthly figures for the month will obviously be different–perhaps much different. But it does give you an idea of how your investment in the C fund is faring this month.

The I fund has not been around as long. It returned 9.82% in April 2003. That was the highest rate of return for this fund. (Of course, as you may remember, it lost almost 21% in October 2008.)

The S fund has not been around as long as the C fund either. It had a return of almost 11% in April 2001; over 9% in May of 2003 and more than 8% in April of 2003 and 7.65% in October of 2003.

So far as least, March has been a good month for stock investors. Keep in mind we are still in a bear market. The market could still go back to testing the low point for this bear market in the near future. But, for today, this may give you something to feel good so enjoy it and, for those who have not moved all of your money from stocks into the G fund, you can finally tell your colleagues your TSP is looking up for the first time in a number of months.

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