C Fund Up 36.29% Over 12-Months
The third quarter of the year just ended for the stock market and the TSP returns for September 2024 are now available. The S&P 500 (the index on which the C Fund of the Thrift Savings Plan is based) ended 2% higher for September and 5.5% higher for the quarter.
For TSP investors, this is great news. The C Fund was up 2.13% for September and it is up 22.04% so far in 2024. For the longer term, over a 12-month period, the C Fund is up 36.29%. This is excellent news for TSP investors who want to accumulate assets for a financially secure retirement.
Investors Increase C Fund Investments During Bull Market—Will Market Euphoria Continue?
According to the latest report from the Federal Retirement Thrift Investment Board (FRTIB), the C Fund now has 35.5% of participants’ allocated assets. The G Fund has dropped to 24.6% of participant assets as the bull market has continued.
The current S&P 500 bull market began on October 12, 2022, 720 days ago, as of this writing. This bull market has already lasted longer than the median of 522 days from the period of 1929-1933. But of the last ten bull markets, dating back to 1970 (including the current one), half have lasted for at least 1,000 days.
When this bull market started in October 2022, TSP participants invested 33.4% of their TSP assets in the G Fund and 29.3% in the C Fund. As the market has advanced, a larger percentage of TSP investors’ money has been invested in the C Fund, while the percentage in the G Fund has decreased.
The latest TSP data is as of August 2024. At that time, the total TSP assets were $941 billion. At the end of October 2022, total TSP assets were about $719 billion.
Here are the returns for the C Fund and G Fund since 2021:
| Year | G Fund | C Fund |
| 2021 | 1.38% | 28.68% |
| 2022 | 2.98% | -18.13% |
| 2023 | 4.22% | 26.25% |
| 2024 (through Sept.) | 3.31% | 22.04% |
The G Fund is the safest TSP Fund as it has not lost money in any year. It has also returned less than the C Fund during this time.
The G Fund was activated in April 1987, and the C Fund was started in January 1988. According to the TSP, since the inception of each Fund, the G Fund has averaged 4.65% each year and the C Fund 11.14% (through August 2024).
Here was a summary of the TSP for October 2022:
TSP Bounces Back But Still Down in 2022
October was a good month for the major stock indexes as the stock market continues to be volatile this year. The Dow Jones Index went up 14% during the month and the S&P 500 index (the index on which C Fund investments are based) was up more than 8%. The Dow Jones performance was its best monthly performance since 1976.
Investing in a stock or a stock fund is difficult when it has been declining. On the other hand, over the long term, investing when prices are lower will often lead to a higher return rate for those with patience and the ability to withstand down cycles in the market.
Investors trying to time the market by buying at a low point and selling at a high one often lose money. Those who may have started investing in the C Fund late in the current bull market will likely experience lower returns than those who were invested at the start of the market.
TSP Returns for September 2024, Year-to-Date and 12-Month Return
| Fund | Month | 12-Month Return | Year-to-Date |
|---|---|---|---|
| G Fund | 0.33% | 4.56% | 3.31% |
| F Fund | 1.34% | 11.51% | 4.52% |
| C Fund | 2.13% | 36.29% | 22.04% |
| S Fund | 1.55% | 28.57% | 11.69% |
| I Fund | 0.77% | 25.28% | 13.17% |
| L Income | 0.72% | 11.46% | 7.01% |
| L 2025 | 0.80% | 13.63% | 8.02% |
| L 2030 | 1.15% | 20.72% | 11.91% |
| L 2035 | 1.24% | 22.39% | 12.76% |
| L 2040 | 1.31% | 24.03% | 13.59% |
| L 2045 | 1.38% | 25.45% | 14.30% |
| L 2050 | 1.44% | 26.84% | 15.01% |
| L 2055 | 1.58% | 31.21% | 17.41% |
| L 2060 | 1.58% | 31.21% | 17.41% |
| L 2065 | 1.58% | 31.22% | 17.41% |
| L 2070 | 1.58% | N/A | 5.20% |
What Happens Next in the Market?
TSP returns follow the stock market indices on which they are based. October is usually the most volatile month in an election year. What will happen in October this year? No one can predict with certainty. Here is a quote from Marketwatch:
History shows that a positive stock-market performance in September during election years since 1945 has led to a gain in the following October nearly 80% of the time, compared with the typical frequency of just 61% across all years….
What’s more, while the third quarter of all years since 1945 has seen the S&P 500 post a gain less than 60% of the time, the benchmark index has registered a gain in the fourth quarter 80% of the time….
The stock market never keeps surging. Stock prices will crash again or go down slowly over time. The median length of a bull market is 522 days. The current market is 722 days. The better news is that for the last ten bull markets—dating back to 1970—half have lasted at least 1,000 days. Of the stock market’s first ten bull markets—between 1929 and 1939—only two lasted longer than 200 days.
Perhaps the current stock market euphoria will continue. Your TSP balance will let you know when it has ended.
