C Fund Shows Positive Return in 8 of Last 9 Months

Your Thrift Savings Plan retirement fund investments are recovering. The C fund is still on a tear with a return of 6% in November and a return of 24.26% so far in 2009.

The stock funds in the Thrift Savings Plan moved up again in November.

The C fund was up 6% for the month, followed by the S fund with a gain of 3.85% and the I fund with a gain of 3.16%. The C fund has now had a positive return in eight out of the last nine months

For the year-to-date, the I fund is ahead of all other TSP funds with a gain of 28.20%. The S fund is up 26.53% and the C fund is up 24.26%.

So what is going on in the stock market?

There were plenty of reasons for the stock market to have gone down. Unemployment is at 10.2% and estimated of the economic growth in the third quarter went down. Also, an event in Dubai rattled investors of the Thanksgiving holiday as the largest conglomerate there said it would stop paying its debts for awhile. That created concern that there are more state-sponsored organizations that may implode.

But, on a more positive note, a forecasting gauge of housing-market activity climbed to its highest level in more than three years in October, and spending on construction in the U.S. in October also went up.

The real reason may be staring us in the face: money is now cheap and investors are trying to get a better return on their money by investing in stocks. The Federal Reserve has kept interest rates down to almost zero and the price of a two-year Treasury note is now providing a rate of 0.671%.

The G fund is doing better than that as it was up 1.26% for the month and is up 2.72% for the year as of the end of November.

And, what the charts below and the monthly figures do not reflect is the gains that have occurred since November 30th as stocks are now up to their highest level in 14 months.

So, what does the future hold? Here is an observation from the president of a portfolio management firm as quoted in the Wall Street Journal on the run-up in stock prices so far in 2009: "We still have a day of reckoning ahead, but that day is being delayed for now."

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