TSP Funds Up Across the Board in July: How Do Your Investments Compare to the Rest of the Federal Workforce?

After two months of declining stock prices, the underlying Thrift Savings Plan stock funds had a good month. How are CSRS and FERS employees investing their TSP funds? There are differences and you can compare your diversification to the rest of the federal workforce. Here are the July and year-to-date results.

July is frequently a lousy month for stock returns. July 2010 was different though.

The Dow Jones Industrial Average closed out the month with a gain of 7.1% to the
blue-chip index. That was the best month in a year. 

The gains were fueled by the second-quarter earnings of many companies. This good news followed two gloomy months of worrying about debt and defaults of European countries. According to the Wall Street Journal, earnings and sales are both up, with profit margins sitting at a record 9.7%.

Investors in the Thrift Savings Plan also benefitted from this good news. After two months of declining values, the C fund was up 7.01% for the month of July; the S fund was up 7% and the I fund moved up 10.78% for the month. For the lifecycle funds, the L2040 fund moved up 6.6%; the L2030 was up 5.8% and the L2020 was up 4.82%.

In calculating how you have done so far in your investments in 2010, be sure to check out the returns for the year. For example, the I fund had the best return of any fund in July but it is still down 4.81% so far in 2010.

The Wall Street Journal recently reported that small investors have become very wary of investing in the stock market. This lack of enthusiasm among investors is not surprising. Consider this: “The Standard & Poor’s 500 stock index has fallen at an annualized rate of 3% a year over the past 10 years, including dividends and controlling for inflation. Long-term Treasury bonds show a gain of 5% a year during that same period, after inflation. Gold is up 10% a year and real-estate investment trusts 8% a year.”

In effect, may TSP investors are generally aware of the large fluctuations in stock market returns over the past decade. Some have decided to leave most of their money in the safe environment of the G fund and to accept a consistent return of 4% – 5% instead of having their money go up as much as 42.92% (2003) in the C fund or go down 38.32% as it did in 2008. 

Among federal employees who are under the CSRS system and who have money in the Thrift Savings Plan, here is how they have invested their money:

  • 53% of their money is invested in the G fund
  • 7% in the F fund
  • 22% in the C fund 
  • 5% in the S fund
  • 4% in the I fund
  • 9% in lifecycle funds 


FERS employees are generally younger and are more dependent on the TSP for their future retirement. Here is how they have invested their money in to the TSP:

  • 45% in the G fund
  • 7% in the F fund
  • 23% in the C fund
  • 7% in the S fund
  • 6% in the I fund
  • 12% in lifecycle funds. 

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