2024 TSP Performance: Two Consecutive Record-Setting Years for Leading Stock Funds
U.S. stocks provided investors with a great return on their investment in 2024. According to the Wall Street Journal, investors will be unlikely to experience the same results again in 2025.
In 2024, the S&P 500 went up 23%. Along the way, it had 57 record highs at the closing of the stock market. U.S. stocks wrapped up their best consecutive years since 1997 and 1998 before the bursting of the dot-com bubble.
In 1997, the C Fund was up 33.17%. In 1998, it was up 28.44%.
The S Fund was unavailable to TSP investors until May 1, 2001. It was introduced then as well as the I Fund being added to investment options. Prior to these funds joining the available TSP investments, the TSP only had three options: the G Fund, F Fund, and C Fund. These three funds were established between 1987 and 1988
For Thrift Savings Plan (TSP) investors, the last two years have created a windfall in the TSP retirement accounts of federal employees—at least for those investors putting their money into the C and S stock funds. Here are the results for the past two years:
| Fund | 2023 | 2024 |
| C Fund | 26.25% | 24.96% |
| S Fund | 25.30% | 16.93% |
| I Fund | 18.38% | 4.27% |
| G Fund | 4.22% | 4.40% |
Why Did the 2024 Stock Market Soar?
High tech was again a big contributing factor to 2024 stock prices, as the dot.com bubble was for the internet revolution in the 1990s. This time, artificial intelligence (AI) played a big role in stock market returns.
A number of companies were highlighting their AI initiatives when reporting their earnings results to investors and analysts. This frequency of AI mentions indicated the growing importance of this technology in corporate strategies for these companies.
Inflation also played a significant role in shaping stock market returns in 2024. Under the Biden administration, inflation has previously reached its highest mark in 40 years. The drop in the inflation rate influenced stock market returns.
The rate of inflation dropped from over 9% in mid-2022 to about 2.6% by October 2024. This decline supported a strong stock market.
TSP Fund Performance for December 2024 and 2024 TSP Returns
| Fund | December 2024 | 2024 Returns |
|---|---|---|
| G Fund | 0.36% | 4.40% |
| F Fund | -1.71% | 1.33% |
| C Fund | -2.39% | 24.96% |
| S Fund | -7.05% | 16.93% |
| I Fund | -2.83% | 4.27% |
| L Income | -0.66% | 7.37% |
| L 2025 | -0.81% | 8.28% |
| L 2030 | -1.86% | 11.52% |
| L 2035 | -2.08% | 12.18% |
| L 2040 | -2.30% | 12.85% |
| L 2045 | -2.49% | 13.42% |
| L 2050 | -2.66% | 14.02% |
| L 2055 | -3.14% | 16.28% |
| L 2060 | -3.14% | 16.28% |
| L 2065 | -3.14% | 16.28% |
| L 2070 | -3.13% | N/A |
TSP Investor Reactions to Stock Market Rise: Hundreds of Billions Added to Stock Funds
In a typical month, about two percent of TSP investors transfer money between funds. Over time, this can make a difference.
We have had two years of excellent stock market returns. How have TSP investors changed their investments?
For the latest month, November 2024, TSP investors had 23.2% of their assets allocated to the G Fund. 36.1% were in the C Fund and 10.6% in the S Fund.
At the end of 2022, before the stock market run over the past two years, 33.1% of TSP asset allocation by investors was in the G Fund. 28.9% was in the C fund and 8.9% was in the S Fund.
G Fund assets by investors dropped to $229.1 billion from $240.1 billion at the end of December 2022. Total assets in the C and S Funds went from $274.4 billion to $460.8 billion.
In other words, as the stock market has gone up, TSP investors have invested hundreds of billions more into the two largest stock funds and invested billions less in the G Fund.
