Coronavirus and the TSP: Which Funds Were Hardest Hit?

The coronavirus significantly impacted the stock market in February. Which funds had the largest losses and which ones gained?

Investing in the stock market provides a premium to investors over time because there is always a risk that the market will go down. The C Fund went up every year from 2008-2018, it went down 4.10% in 2018 but up 31.45% in 2019.

This month, one of those unknown risks popped up and stock market investors are now seeing a down market. The past week has been stressful for those who may have the bad habit of watching returns in the stock market every day.

After hitting a new high on February 19, the S&P 500 (the index on which the C Fund is based) went on to record its fastest decline ever from a new record-setting high. Over a period of seven days, the market dropped 13%—a drop in value of $3.6 trillion from the stock market according to the Wall Street Journal.

So, while stock investors enjoyed a big ride up in the value of their TSP accounts from 2003-2019 with only three years of a down market, there is undoubtedly a lot of consternation among some TSP investors who may be inclined to sell their stock funds to see what happens next.

And, of course, we do not know if the market will rebound sharply or if we will see an extended period with a declining stock market.

TSP Results for February and Year-to-Date

The results from the TSP stock funds for February are fairly predictable. The C Fund had the largest loss for the month at -8.04%. The S Fund finished at -8.01 and the I Fund at -7.74%.

G Fund F Fund C Fund S Fund I Fund
Month 0.13% 1.82% -8.04% -8.01% -7.74%
YTD 0.30% 3.77% -8.28% -8.58% -10.25%

L Income L 2020 L 2030 L 2040 L 2050
Month -1.52% -1.76% -4.65% -5.58% -6.39%
YTD -1.51% -1.77% -5.08% -6.14% -7.06%

For the first trading day of March, the market posted huge gains to close the day. So, hopefully, the significant downtrend for the past several weeks has passed. But, whether that is the case or not, we can anticipate significant volatility in the stock market as events unfold based on what is happening to slow the coronavirus and what is occurring with other international events.

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