The stock market has been setting new records. On Friday, July 23rd, the Dow Jones Industrial Average set a new record (above the 35,000 milestone) for the first time. The S&P 500 Index (the index on which the TSP’s C Fund is based) has also set new performance records for a second consecutive session.
As Stock Market Soars, So Do TSP Millionaires
So, what does this mean for your Thrift Savings Plan (TSP) investments? As the stock market goes up, returns in the Thrift Savings Plan go up as well.
For the year-to-date:
- C Fund up 18.68%
- S Fund up 14.06%
- I Fund up 9.61%
- G Fund up 0.75%
- F Fund down -0.66%
To put this in perspective, the C Fund for 2020 gained 18.31% for the entire year. The S Fund gained 31.85% for the year and the I Fund 8.17%. The F Fund gained 7.5% in 2020 while the G Fund went up 0.97%.
In other words, while we may have been spoiled with excellent stock market performance in recent years, the markets are still going up.
This will make TSP investors happy. Take a look at TSP prices at the close of 2016. The price for a C Fund share at the end of 2016 was $30.87. It is now up to $66.35. The price for a share of the S Fund in 2016 was $44.96. It is now up to $84.63. The result for TSP investors leads to articles with headlines like this: As Stock Market Soars, So Do TSP Millionaires.
A Cautionary Note
Note that while the S Fund is still powering forward, its growth has slowed. Smaller company stocks are under pressure as economic growth is slowing. The growth in the stock market is coming largely from a small group of bigger company stocks. Earlier in the year, a much larger group of stocks were going up. That number is much smaller now.
The federal government’s TSP now has more than $773 billion in assets.
Here are the average balances for TSP participants:
- FERS Participants: $173,896
- CSRS Participants: $185,548
- Uniformed Services: $37,342
The C Fund now has 30.8% of TSP participants’ allotted funds. In second place, the G Fund has 26.9% of participant allotted funds. 22.4% of these assets are now in the Lifecycle Funds.
In June, $746 million was transferred out of the G Fund. $486 million was transferred into L Funds, $165 million into the C Fund, and smaller amounts were transferred into the F Fund, I Fund, and the S Fund.
FedSmith will publish a more complete list of all TSP returns for July on August 1st.