TSP funds make strong gains in September
The three riskiest funds in the Thrift Savings Plan performed well last month, with international investments posting the largest monthly gain yet this year.
The I Fund, which invests in international stocks, grew 5.36 percent. September's growth brought the fund's 12-month gains to 24.96 percent -- also the highest increase of any fund over that period. This marks a strong reversal from August, when the I Fund was the only one to post losses.
The C Fund, which tracks Standard & Poor's 500 Index, gained 3.76 percent for September, bringing its 12-month increase to 16.53 percent.
The S Fund, which invests in the stocks of small- and mid-sized American companies, grew 2.97 percent last month. The fund tracks the Dow Jones Wilshire 4500 Index, which invests in the 4,500 next largest domestic companies after the 500 tracked by the C Fund. The S Fund's 12-month gains stood at 18.79 percent.
The fixed-income bonds included in the F Fund grew 0.78 for the month, bringing 12-month earnings to 5.27 percent.
The government securities, or G Fund, which is the most reliable, had minimal gains of 0.41 percent last month for a yearlong 4.93 percent increase.
The TSP's life cycle options, which automatically adjust to a more conservative mix of investments as participants near retirement, also made strong gains last month. Those designed for younger employees earned the most, because they invested more heavily in the I, C and S funds.
The L 2040 fund, designed for participants anticipating retirement around 2040, grew 3.45 percent. The L 2030 Fund gained 3.09 percent; the L 2020 rose 2.68 percent; the L 2010 increased 1.78 percent; and the L Income, designed for employees with retirements in the very near future, gained 1.13 percent.
The L funds with riskier allocations also earned more over 12 months. L 2040 gained 17.14 percent, L 2030 grew 15.63 percent, L 2020 gained 14.02 percent, L 2010 earned 10.82 percent and L Income made 7.71 percent.
COMMENTS
- Agreed. Weak dollar policy will remain through at least this president's admin, which will put wind to the back of I fund. Enjoyed the deflation of I-fund in August -- twas a great opportunity to increase shares by 20+%, which I'm now selling back and rebalancing. nomantoo Posted October 4, 2007 5:13 PM
- Even the Nervous Nellies who pulled out of the higher risk funds should consider that when the stock funds are down is the time to buy in. So if you decide to pull out to “protect” your sunk-funds, you should continue buying in with new deposits since you will gain as the stock funds return to their previous levels. Tip off Posted October 4, 2007 2:04 PM
- Good posts - although risk is in the eyes of the beholder. We all consider certain things risky than others. For instance what a 30 yr old considers avg risk....a 60 yr old might think it's gambling. It also relates to how much you have saved, how much you earn...etc. On any risk analysis chart, you'll see that C,S, and I funds are riskier than the G and F by far. Their potential reward/gain is also higher. As for the timing....with a interest rate cut....you've probably seen bottom or close to it for the market barring any disaster..etc. Economic news is up one day - down the next but the market is still gradually going up. After I saw the I dive...I allocated some of my F funds over and some of my C funds...plus I increased my contribution amt over to the I and it's paid off already. Have to remember one thing in all of this....as long as the dollar is weak against everyone else....the I fund will continue to do well because of currency differences. Take a look at the I fund sheet - for more details. That is what is making up a big amt of the I funds performance...and it doesn't look like the dollar is going to strengthen at time soon. Jimmy Posted October 4, 2007 1:04 PM
