Which TSP Funds Gained Over 20% in 2017?

2017 provided good returns for TSP investors. Which funds came out on top for the year?

Your TSP Returns in 2017

The S&P 500 index, the index on which the Thrift Savings Plan (TSP) is based, gained more than 19% in 2017. This is more than triple some Wall Street projections made at the beginning of the year. The Dow Jones Industrial Average was up even more, gaining about 25% for the year.

For TSP investors, the C fund finished the year with a return of 21.82%. The I fund was the best performing fund for the year with a return of 25.42%. The G fund had the lowest return for the year at 2.33%.

For the lifecycle funds, the fund with the highest return was the L 2050 fund with a return of 18.81% and the fund with the lowest return was the L Income fund with a 6.19% return.

Many individual investors believe the stock market will continue with strong gains in 2018.

Nine Years of Positive Returns for the C Fund

From 2009-2017, stock market investors have had nine years of positive returns. The C fund has had a positive return each year since 2009. (Check out annual returns for all of the TSP funds.)

Many investors have held back and started buying more stocks after any dip in prices, including small dips, confident the market will continue on to new record highs. That has been a good strategy for the past few years.

The new tax bill is likely to increase earnings for many companies. After years of a mediocre economic recovery from the last recession, there is optimism that the run-up in prices will still have a long way to go before taking another significant dip.

Beware of Buying High and Selling Low

On the other hand, U.S. stocks are already trading at levels that are historically high. There is a feeling among some investors that “this time will be different” for a variety of reasons and that stocks can continue their upward trend.

And, to be fair, they may well continue going up in 2018. Investors usually start investing more of their assets into stocks with the most enthusiasm as a bull market is coming to an end. Of course, we never know when a market trend will end and it seems easy to second guess what investors should have done with the benefit of hindsight.

Investors are also inclined to sell stocks in large numbers near the end of a bear market as resignation and disappointment sinks in. Making investment decisions at both extremes insures an investor bought stocks at a high level and sold at low stock market levels thereby locking in their losses.

TSP Results

Here is how all of the TSP funds performed in December and for the past 12 months:

G Fund F Fund C Fund S Fund I Fund
Month 0.20% 0.48% 1.11% 0.47% 1.60%
12 Months 2.33% 3.82% 21.82% 18.22% 25.42%


L Income L 2020 L 2030 L 2040 L 2050
Month 0.41% 0.57% 0.81% 0.92% 1.00%
12 Months 6.19% 9.86% 14.54% 16.77% 18.81%

What Happens Next?

For those who pay attention to facts that are interesting but may be irrelevant in any given year, here is an interesting statistic from Marketwatch. In the past 20 years, the stock market’s S&P 500 index has closed higher on the first trading day of the year 10 times.

When this stock market index has been up on the first trading day, the return for the year has been just over 14%. When the market is down on the first trading day of the year, the return for stocks in the year has been -0.6%.

In a similar vein, according to the same article, there are 10 times since 1950 that the stock market has gone up at least 25%. In the year following such a large advance, the Dow Jones Industrial Average has gone higher in 8 of those 10 years.

Regardless of what happens by the end of 2018, there is likely to be more volatility in the stock market. And, as always, there could be highly unusual, unpredictable events that impact what happens to stock prices during the year.

We wish all of our readers the best of luck in making their investment decisions that may determine your financial status during a long retirement.

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