Stocks ended a four-week losing streak on the final trading day in August. The volatile month for stocks ended a few percentage points below their all-time high. The S&P 500 index (the index on which the C Fund is based), is up about 17% for the year although this index finished down for the month.
As a result, the C Fund is also down in August falling 1.59%. But, good news for Thrift Savings Plan (TSP) investors: this fund is still up 18.32% for the year.
Surprised? F Fund Wins 12 Month Return Rate
The TSP fund with the highest return in August: the F Fund with a monthly return of 2.60%. This fund is also up 9.11% so far in 2019. Moreover, the F Fund has the highest rate of return among all TSP funds for the past 12 months with a return of 10.23%.
TSP Fund Returns for August 2018, Year-to-Date and Last 12 Months
|G Fund||F Fund||C Fund||S Fund||I Fund|
|L Income||L 2020||L 2030||L 2040||L 2050|
Interfund Transfers in August
TSP investors unloaded about $747 million from the G Fund in August, another $165 million from the F Fund and about $373 million out of the S Fund. On the other hand, they transferred about $857 million into the C Fund, $43 million into the I Fund and $385 million into lifecycle funds.
To put this into perspective though, the TSP now has about $600 billion under management. So, while hundreds of millions of dollars is a large amount of money, it is still a relatively small percentage of the overall assets in the TSP.
Here is how average balances break out among groups in the Thrift Savings Plan at the end of July.
The participation rate for FERS investors is about 91% and has remained stable for the past few months. The uniformed services participation rate has increased to about 64% which is a 12% increase since January 2019.
|Total Participants||Average Balance||Number of Roth Participants||Average Roth Balance|
The high performance for the F Fund in recent months will surprise some investors. The volatility of the stock market will also scare some investors. Some TSP participants will see the negative performance for stock funds in August and start selling their stock funds.
No one knows what the stock market returns will be for 2019. There are plenty of predictions from experts. The market often surprises both experts and inexperienced investors.
The millionaires in the TSP and in private sector stock investments often note that the best way to make money for your future retirement is through diversification, making regular investments, and not reacting to headlines in the news when deciding to buy or sell your stock funds.
The C Fund has provided positive annual returns for investors in 14 out of the past 19 years. During this time we have had elected leaders from both parties, experienced recessions, survived a black swan event that killed thousands of Americans and witnessed dramatic volatility in the stock market, and positive and negative earnings results over these years. Investors who stayed the course, did not panic at the latest scary event, and kept investing in up and down markets still had a good return in the stock market.
And, as we know, there are now almost 38,000 millionaires in the Thrift Savings Plan (TSP) and the average time of investing in the TSP for these successful investors has been more than 29 years. They obviously profited from their investments over time and took the risk of investing in stocks as well as the G fund (the most popular TSP fund). Most people could have achieved these results over time but most do not.
We wish all of our readers a successful investment future for their retirement funds!