Will there be a government shutdown this year? No one can be certain. At the time of this writing, a shutdown is still possible. While many readers will not be at work during a shutdown, accessing your TSP account will not be a problem.
At the monthly TSP meeting held on September 26th, members of the Federal Retirement Thrift Investment Board (FRTIB) were advised by the TSP’s Jim Courtney that the TSP will continue its normal daily operations and TSP participants, including those with outstanding TSP loans, do not have to take any action. TSP loans will be kept in good standing in the event of a government shutdown. The TSP’s call center will remain open and all the usual transactions available to participants will still be available.
TSP participants can see updated information on the TSP during the possible shutdown at this website address.
2023 TSP Performance Through September 25th and Year-to-Date
As FedSmith noted at the start of the month, September is often the weakest month for the stock market and TSP performance. Unfortunately, September 2023 has not altered this typical scenario, as this September has also been one for declining stock values.
Core Fund Returns So Far September 2023
For August, the C Fund was down 1.58%. So far in September? It is down another 3.70% as of September 25th. The good news is that it is still up 14.32% for the year—the highest return for the year-to-date of any TSP Fund. Here are the results for the TSP core funds through the market’s close on September 25th:
| Fund | September Return |
| G Fund | o.29% |
| F Fund | -2.27% |
| C Fund | -3.70% |
| S Fund | -5.30% |
| I Fund | -2.71% |
TSP Returns for All TSP Funds—Month and Year-to-Date
| Fund | Month-to-Date | Year-to-Date |
|---|---|---|
| G Fund | 0.29% | 2.92% |
| F Fund | -2.27% | -0.77% |
| C Fund | -3.70% | 14.32% |
| S Fund | -5.30% | 8.39% |
| I Fund | -2.71% | 7.83% |
| L Income | -0.82% | 4.84% |
| L 2025 | -1.26% | 6.05% |
| L 2030 | -2.19% | 7.84% |
| L 2035 | -2.43% | 8.28% |
| L 2040 | -2.67% | 8.75% |
| L 2045 | -2.87% | 9.13% |
| L 2050 | -3.06% | 9.54% |
| L 2055 | -3.55% | 11.22% |
| L 2060 | -3.55% | 11.22% |
| L 2065 | -3.55% | 11.21% |
On a positive note, the yearly returns of almost all of the TSP Funds are still positive for the year despite disappointing returns so far in September. The exception is the F Fund which is off 0.77% so far in 2023.
Federal Reserve and Bond Rates
The Federal Reserve held interest rates steady at the central bank’s recent policy meeting. Officials also indicated they expect rates to be higher further into 2024. The prospect of higher interest rates has harmed stock market returns.
The Wall Street Journal notes:
With interest rates going higher, bond yields continued upward. The benchmark 10-year Treasury bond yield is at the highest level since 2007. As noted in the Wall Street Journal: Investors watch movements in the 10-year carefully because the yield is a benchmark for household and borrowing costs. Higher yields on safe assets like government bonds make riskier assets like stocks look less attractive.
Stated in a way of the most interest to FedSmith readers, your G Fund investment is looking good this year, and it may go higher with rising interest rates.
Market Trends and Your TSP Investments
Investing in the stock market can be stressful for those who choose to watch the daily returns. That is generally not a good idea as it often leads to making short-term decisions that will have a negative impact on your investment returns.
The TSP is one of the most popular federal employee benefits. It is easy to use and understand. Those who become TSP millionaires are usually individuals who have an investment philosophy, spread out their investments, continue to invest on a regular basis, and ride out the up-and-down trends in the stock market. Generally, this provides a good source of future retirement income.
We wish all FedSmith readers the best in making their investment decisions!
