TSP Monthly Recap

After positive July, August returns dip back into negative territory for all core funds except G.

Jennifer Meyer, CFP

Well, the market rebound of July 2022 was short lived. Although August started out with some continued momentum, by mid-month the momentum was turning, and the month ended on a decidedly negative note.

Continuing uncertainty around high inflation and rising interest rates is the main culprit of the current market downturn. Although inflation data has shown signs of slowing, the rhetoric from the Federal Reserve indicating they will not stop raising rates until inflation returns to is pre-pandemic rates of about 2% annually continues to create skittishness for market participants. The next Federal Reserve meeting is not scheduled until the end of September. There will be an inflation update on September 13 which will be very important in the decision the Federal Reserve will make at the end of September regarding the size of their next rate hike. It is widely expected that the next rate hike will be either .50 or .75 basis points. If the September inflation data comes in high, it is likely they will raise rates by .75 points. There will certainly be market volatility in September, with market participants guessing which way the Fed will go at the end of the month. Having a disciplined investment strategy and sticking to it through good times and bad has been shown to produce long term investor success. 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.

Performance figures for the month of August 2022 have been posted on the TSP website. The G fund was the best performer for the month, with a positive 0.25% return, while the I fund was the worst, falling by 5.79%. Monthly returns from 2022 and year to date returns for 2022 and longer-term averages are shown below. (source, TSP.gov)

Year G Fund F Fund C Fund S Fund I Fund
Last 12 months 2.17% -11.27% -11.23% -24.72% -19.88%
2022 YTD 1.66% -10.45% -16.15% -22.14% -19.71%
2022 Monthly          
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 August 31, 2022.  (source, TSP.gov).

Year G Fund F Fund C Fund S Fund I Fund
1 year 2.17% -11.27% -11.23% -24.72% -19.88%
3 Year 1.53% -1.87% 12.35% 8.29% 2.51%
5 year 1.98% 0.64% 11.79% 7.94% 1.87%
10 year 2.00% 1.61% 13.08% 10.91% 5.28%
Inception Date 4/1/1987 1/29/1988 1/29/1988 5/1/2001 5/1/2001

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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.***

TSP Monthly Recap

TSP Monthly Recap for August 2022