John Grobe

The Thrift Savings Plan recently updated the performance of the various TSP funds in the “Investment Funds” section of their website. When you click on “monthly returns” on the TSP homepage, you will be taken to a page that contains a table giving both the most recent 12-month performance and year-to-date results of the current TSP funds; both the basic funds and the Lifecycle funds. Also on the page are links to various other charts and tables that describe fund returns over various periods of time.

If we look at the ten year returns for the period that ended on December 31, 2019, we see that the three stock funds (C, S and I) outperformed the two fixed income funds (F and G). When we look at the Lifecycle funds, not surprisingly, we see that the L funds with the highest percentage of stocks outperformed the more cautious funds.


We also see that there’s a new “big dog” among the basic funds. After several years where the S Fund had the best ten-year return, it has been replaced at the top of the heap by the C fund. In rank order the funds are: 1) C, with a ten-year return of 13.59%; 2) S, with a ten-year return of 13.08%; 3) I, with a ten-year return of 5.85%; 4) F, with a ten-year return of 3.99%; and 5) G, with a ten-year return of 2.23%.

Another item worth noting is that the G Fund’s “since inception” return dropped below 5%. From 5.09% at the end of 2018, the G Fund’s average annual return (going all the way back to April 1987) dropped to 4.94% per year as of the end of 2019. As long as the government keeps artificially stimulating the economy by keeping interest rates low, we will see the G Fund producing sub-par returns. G Fund returns will get even worse if the administration has its way and lowers the rate earned by the G Fund.

See also, G Fund No Longer Keeping Up with Inflation

It’s difficult to make predictions, especially about the future
– Mark Twain

Statistics are good at telling us what has happened. However, they don’t tell us a thing about what is going to happen.

Let’s look at the C Fund statistic mentioned in the third paragraph. It correctly states the ten-year average return of the C fund, but it doesn’t tell you that the C Fund lost 4.41% in 2018 or earned 32.45% in 2013. So, what should you do?

First and foremost, take all statistics with a grain of salt; do not assume that a statistic has any predictive value.

Second, develop your own strategy; perhaps with the assistance of a financial planner.

Third, realize you are in the TSP for the long haul; continue to contribute as much as you can.

And finally, remember the quote that has been attributed to Yogi Berra, Mark Twain, Niels Bohr and others: “It’s difficult to make predictions, especially about the future”.

TSP Stock Funds Rocked by Volatility; Virus and Oil Price War Rattle Markets (3/9/2020)

What Does the Next Decade Have in Store for Stocks? (1/6/2020)

TSP Investors Handbook, New 6th Edition