Should you believe TSP statistics (or statistics about anything for that matter)?  You can if you realize exactly what statistics are — they are snapshots in time.  If I were to tell you that the C Fund had earned an average annual return of 10.16% from its inception in January of 1988 through December 31 of 2016 it would be a true statement.  This represents the latest information available in the C Fund’s “fund sheet” that was available on the TSP website at the time I put this article together.  On the TSP website I could also find accurate past numbers that show the return of each TSP fund over each year of its history.

However, statistics don’t tell you a thing about what the future holds.  Mark Twain has several good sayings about statistics and my favorite is: “Many people use statistics in the same manner in which a drunk uses a lamp post; for support, rather than for illumination.”  Twain’s quote warns us about some of the misuses of statistics.


Let’s look at the C Fund statistic mentioned in the first paragraph. It is true, but so is the statistic that the C Fund lost 36.99% in the year 2008 or earned 32.45% in 2013.  A financial adviser who wanted you to invest in an equity indexed annuity would likely focus on the 2008 number.  An adviser who believed in a “buy and hold” strategy would focus instead on the long term return of the fund (i.e., the “since inception” statistic from the first paragraph of this article).  And both of them could be wrong.

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”.