The stock market is not having a good month.
The C fund in the Thrift Savings Plan (TSP) is down about 8% for the month when writing this article, but there are still a few trading days left in January, so the final monthly returns may look better than they do currently. (See the daily return rate for each day in January at TSPDataCenter.com)
Readers who want to see the daily returns for each TSP fund can receive a free daily update sent to your preferred email address by signing up for the Daily TSP Rates Summary.
What investment actions did TSP investors take last month? The table below highlights actions by TSP investors into and out of the different funds.
December TSP Transfers
| Fund | Deposit (Withdrawal) |
|---|---|
| F Fund | ($315 million) |
| I Fund | ($123 million) |
| C Fund | $178 million |
| S Fund | $151 million |
| G Fund | $3 million |
| L Funds | $106 million |
For the first three weeks of January, investors have been withdrawing money from stock funds and putting more money into government bonds. Chances are, when the TSP statistics are released for January actions by TSP investors, we will see the same trends for the TSP funds.
Some readers probably subscribe to the “January effect” theory which holds that whether stocks go up or down in January will predict what will happen to the stock market from February through December. If that theory is correct, TSP investors will move their money into the G fund and dump their stock funds.
But, according to research in Marketwatch, even when January is a down month for stocks, there is still a better-than-even chance that the market will go up for the rest of the year. In effect, the theory is often or usually incorrect in predicting short term market trends. As noted by Mark Hurlburt in his article: “Consider the 20 years since 1896 in which the Dow fell by at least 10% from February through December: The Dow rose in 11 of those years’ Januarys, or more than half the time.”
In other words, this may not be a good time to sell all of your stock funds as the January effect theory is not a reliable indicator for future stock market prices during the year.
TSP Trends
Assets under management at the TSP were down in December, declining by $4.8 billion as a result of the drop in stock prices. The TSP currently has assets of about $458 billion and about $3.7 billion in Roth accounts. In November 2015, the total in the TSP was about $463 billion with $3.6 billion in Roth accounts.
There was an increase in age-based withdrawals for the year, according to the TSP, as more TSP participants took advantage of age-based withdrawals . The number of dollars withdrawn also increased in 2015.
2015 was also a record year for roll-ins for the TSP which exceeded $1.15 billion.
About 88.1% of FERS employees participate in the TSP. 61.1% of CSRS employees are participants.
Average balances in TSP accounts for the most recent month break out as follows:
| TSP | Roth TSP | |
|---|---|---|
| FERS | $115,607 | $7,140 |
| CSRS | $117,966 | $11,531 |
