TSP Update for Month Ending January 2023 - all 5 core funds saw positive growth last month, with the three equity funds each gaining more than 6%.
Proving once again that it is impossible to time the market, those investors who were disciplined enough to stick to their asset allocations in 2022 were rewarded in January with a broad market rally that had all five of the core TSP funds up for month. In fact, both the S and I stock based funds outperformed the C fund for the month, which did not happen once in 2022.
This begs the question, “Jen, could the tide be turning? Is the bear market over?” I refer you back to the first words of this article, “it is impossible to time the market.” I do not know if the next few months will be up or down for the market, but I do know that data shows it is more important to have “time IN the market” versus “TIMING the market.”
Another critical component of successful long-term investing, is to continue (and increase if possible!) contributions to your investments during market downturns. Why wouldn’t you want to buy more shares when they are on sale?
As a reminder, the IRS announced the new limits for contributions to TSP in 2023. The maximum amount a participant under age 50 can contribute is $22,500. The catch up for investors over age 50 was increased to $7500 for 2023. The total contribution for employees over age 50 for 2023 is $30,000. This is great news for retirement savers. The silver lining of bear markets is the opportunity to buy low. Don’t miss that opportunity when it presents itself!
I am often asked how to build a good investment strategy for TSP. If you are unsure how to create an investment strategy that you can stick to, there are many resources available to you via Serving Those Who Serve. Start by registering for an upcoming TSP webinar on the Serving Those Who Serve website. I host these webinars with several teammates on a rotating schedule. I look forward to seeing you!
Monthly and year to date returns effective January 31, 2023 and longer-term averages are shown below. (source, TSP.gov)
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
| Last 12 months | 3.19% | -8.07% | -8.24% | -9.13% | -2.84% |
| 2023 YTD | 0.34% | 3.25% | 6.28% | 10.82% | 8.43% |
| Jan 2023 | 0.34% | 3.25% | 6.28% | 10.82% | 8.43% |
| 2022 Monthly | |||||
| December | 0.32% | -0.65% | -5.78% | -6.55% | -1.85% |
| November | 0.35% | 3.70% | 5.58% | 3.59% | 13.72% |
| October | 0.34% | -1.26% | 8.10% | 8.59% | 5.98% |
| September | 0.28% | -4.31% | -9.21% | -9.91% | -9.40% |
| August | 0.25% | -2.80% | -4.08% | -2.08% | -5.79% |
| July | 0.26% | 2.47% | 9.22% | 10.32% | 5.15% |
| June | 0.29% | -1.94% | -6.55% | -7.95% | -8.21% |
| May | 0.21% | 1.13% | -1.65% | -3.53% | 1.19% |
| April | 0.20% | -3.75% | -8.72% | -10.57% | -6.39% |
| March | 0.17% | -2.73% | 3.72% | 0.90% | -0.33% |
| February | 0.14% | -1.08% | -2.99% | 0.03% | -2.61% |
| January | 0.13% | -2.09% | -5.18% | -10.07% | -3.96% |
Month to month trends as shown above are interesting, but it is important to remember that short term market volatility is to be expected and employees should not be making investment decisions based on short term performance. Following are longer term rates of return for each fund, as of January 31, 2023. (source, TSP.gov).
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
| 1 year | 3.19% | -8.07% | -8.24% | -9.13% | -2.84% |
| 3 Year | 1.83% | -2.20% | 9.84% | 6.83% | 4.97% |
| 5 year | 2.12% | 0.98% | 9.50% | 6.37% | 2.58% |
| 10 year | 2.11% | 1.68% | 12.69% | 10.11% | 5.35% |
| Since Inception | 4.67% | 5.44% | 10.56% | 8.79% | 4.84% |
| Inception Date | 4/1/1987 | 1/29/1988 | 1/29/1988 | 5/1/2001 | 5/1/2001 |
Please reach out to us with questions and follow our website for the most recent updates. We are here to serve you! Thank you for your service to our government!
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**Written by Jennifer Meyer, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jennifer Meyer and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
***The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency or service, if you're eligible to receive agency or service contributions) put into your account during your working years and the earnings accumulated over that time. The Federal Retirement Thrift Investment Board (FRTIB) administers the TSP.***
