C Fund is up 36.29% in 12-months
The third quarter of the year has just ended for the stock market and TSP returns for September 2024 are now available. The S&P 500 (the index based on the Thrift Savings Plan’s C fund) ended September 2% higher and 5.5% higher for the quarter.
For TSP investors, this is great news. The C fund rose 2.13% in September and is up 22.04% so far in 2024. Over the long-term, over a 12-month period, the C Fund rose 36.29%. This is excellent news for TSP investors looking to accumulate assets for a financially secure retirement.
Investors Increase C Fund Investments During Bull Markets—Will the Market Euphoria Continue?
According to the latest report by the Federal Retirement Thrift Investment Board (FRTIB), the C fund now holds 35.5% of participants’ allocated assets. The G Fund fell to 24.6% of participant assets as the bull market continued.
The current S&P 500 bull market began 720 days ago as of this writing on October 12, 2022. This bull market has already lasted longer than the 522-day average from the 1929-1933 period. But of the last ten bull markets, dating back to 1970 (including the current market), half have lasted at least 1,000 days.
When this bull market began 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 advanced, a greater percentage of TSP investors’ money was invested in the C fund, while the percentage in the G fund decreased.
The latest TSP data is as of August 2024. At that time, total TSP assets were $941 billion. As of the end of October 2022, total TSP assets are approximately $719 billion.
Here are C fund and G fund returns from 2021:
| the year | G Fund | C Fund |
| 2021 | 1.38% | 28.68% |
| 2022 | 2.98% | -18.13% |
| 2023 | 4.22% | 26.25% |
| 2024 (up to September) | 3.31% | 22.04% |
G Fund is a safe TSP fund that has never lost money in any year. During this period it returned less than the C fund.
The G Fund was activated in April 1987 and the C Fund was launched in January 1988. According to the TSP, since the inception of each fund, the G fund has averaged 4.65% and the C fund 11.14% annually (as of August 2024).
Here is a summary of the October 2022 TSP:
TSP will bounce back but still decline in 2022
October was a good month for the major stock indices as the stock market continued to be volatile this year. The Dow Jones index rose 14% for the month and the S&P 500 index (an index based on C fund investments) rose more than 8%. The Dow Jones performance is the best monthly performance since 1976.
It is difficult to invest in a stock or stock fund when it is falling. On the other hand, in the long run, investing when prices are low can lead to higher rates of return for those who are patient and able to withstand cycles in the market.
Investors try to time the market by buying at a low point and selling at a high. Those who started investing in the C Fund late in the current bull market will experience lower returns than those who invested early in the market.
TSP returns for September 2024, year to date and 12 months return
| treasure | month | 12-month return | Year to date |
|---|---|---|---|
| G Fund | 0.33% | 4.56% | 3.31% |
| 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 will happen next in the market?
TSP returns follow the stock market indices on which they are based. October is usually the most volatile month of an election year. What will happen in October this year? No one can predict for sure. Here’s a quote from Marketwatch:
[Inelectionyearssince1945favorablestock-marketperformanceinSeptemberhasresultedingainsinthefollowingOctobernearly80%ofthetimecomparedwithanormalfrequencyofonly61%overallyears[1945నుండిఎన్నికలసంవత్సరాలలోసెప్టెంబర్లోసానుకూలస్టాక్-మార్కెట్పనితీరుఅన్నిసంవత్సరాలలోకేవలం61%సాధారణపౌనఃపున్యంతోపోలిస్తేదాదాపు80%సమయంతరువాతిఅక్టోబర్లోలాభపడింది
What’s more, in all years since 1945 the S&P 500 posted a gain less than 60% of the time in the third quarter, while the benchmark index posted a gain in the fourth quarter 80% of the time….
The stock market never goes up. Stock prices will either crash again or slowly decline over time. The median length of a bull market is 522 days. The current market is 722 days. The good news is that half of the last ten bull markets—dating back to 1970—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 notify you when it runs out.
© 2024 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written permission from Ralph R. Smith.
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