TSP Stock Funds Dive in August

All of the stock funds for the Thrift Savings Plan were down significantly in August. Here are the results for the month and for the year for all of the TSP funds.

All of the stock funds in the Thrift Savings Plan (TSP) were down significantly in August.

The C fund dropped 6.03%, the S fund down 5.80% and the I fund was down 7.36%. The S&P 500 index, the index on which the TSP’s C fund is based, fell 6.3% in August. Its results in August were the worst monthly results in more than three years. Based against other August returns, the S&P 500 index recorded its worst swoon since 2001, when it tumbled 6.41%.

Those with their investments in the G fund, probably feel a sense of relief as their investments are up 1.33% for the year and still up 2.07% for the past 12 months.

Here are the results for all of the TSP funds for the month:

G Fund F Fund C Fund S Fund I Fund
Month 0.18% -0.11% -6.03% -5.80% -7.36%
YTD 1.33% 0.68% -2.84% -1.24% 0.73%
12 Month 2.07% 2.01% 0.55% -0.15% -7.23%


L Income L 2020 L 2030 L 2040 L 2050
Month -1.10% -3.06% -4.04% -4.69% -5.37%
YTD 0.83% 0.13% -0.31% -0.61% -0.89%
12 Month 1.54% 0.37% -0.21% -0.60% -1.14%

Did you sell your stocks since the downturn in stocks is reducing the value of your stock market investments?

Anyone investing in stocks knows (or should know) that they can and will go down in value during normal market fluctuations. If you are investing for the long term and quickly dumped your TSP stock funds during this correction, you may want to evaluate your actions and your financial plan. Those who reacted quickly to the loss in the value of stock funds by selling are likely to find that the correction currently underway will be forgotten when the money is needed for living expenses. Time in the market, rather than market-timing, usually brings success to stock market investors.

Of course, if you are retired or close to retirement and will be relying on your investment assets for a comfortable retirement income, investing heavily in stocks involves more risk.

If you are young, or at least relatively young, and have a number of years to go in your career, the popularity of the idea that market declines in stock values are an opportunity to increase your investment in stocks may make you nervous, even though it is usually the right thing to do according to long term investors. But, if you are in or near retirement and will be relying on this investment money in the short term future, it should scare you because the advice may not work out well for you.

Stocks can take awhile to recover their value. If you are a 30 something federal employee, keep investing and you should be in great shape when you are 60—perhaps one of the TSP millionaires we have written about. But, if you will need that money in the near future for living expenses, stocks are a much more risky investment. If the market should drop 20% or so, which is not likely at this time but not an impossibility, your financial comfort in retirement may be in jeopardy.

As Wall Street Journal columnist Jason Zweig has written, “In order to capture the potentially higher returns that stocks can offer, you have to reconcile yourself to the certainty of horrifying short-term losses. If you can’t do that, you shouldn’t be in stocks—and shouldn’t feel any shame about it, either.”

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