TSP Update for last month’s fund performance – core funds all had a positive 30 days.
The market rally that began in October continued through the month of November. US inflation data shows continued slowing of inflation which helped markets as they continue to try to predict when the current cycle of raising interest rates will come to an end. The mid-term elections did not prove to be a red wave which some had predicted. As expected, the control of the House went to the Republicans, but the Democrats held onto the Senate. Knowing that we will likely have gridlock in Washington until the 2024 election as a result lends some certainty to an otherwise very uncertain year. Globally, several currencies rebounded against the dollar. This helped the I fund return a stellar 13.72% for the month. It was the best performer of the month in TSP. As I often say- it is impossible to predict when these types of moves will occur, which is why it is so important to be diversified across all of the 5 core funds in TSP.
Many are questioning if this marks the end of the current bear market or simply is a temporary rally that will fade into 2023. Many factors will determine the answer to this, it is impossible to know right now how companies will hold up over the next 12-24 months in this higher interest rate environment. I cannot emphasize enough why it is critical to have a disciplined strategy and to stick with it during these periods of market volatility. Moving funds in and out of the market attempting to time the market has been proven to be detrimental to long term investment success.
As announced last month, 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. This is an increase of $2000 over the 2022 limit. In addition, the catch-up limit is $7,500 for those age 50 and over. The total contribution for employees over age 50 for 2023 is $30,000. This is great news for retirement savers.
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. Register Here.
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 | 2.77% | -12.54% | -9.21% | -20.63% | -7.85% |
| 2022 YTD | 2.65% | -12.26% | -13.11% | -21.09% | -12.32% |
| 2022 Monthly | |||||
| 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 November 30, 2022. (source, TSP.gov).
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
| 1 year | 2.77% | -12.54% | -9.21% | -20.63% | -7.85% |
| 3 Year | 1.72% | -2.43% | 10.87% | 6.12% | -2.95% |
| 5 year | 2.07% | 0.33% | 10.94% | 6.42% | 2.63% |
| 10 year | 2.06% | 1.35% | 13.34% | 10.76% | 5.56% |
| 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.***
