For the third month in a row, all of the Thrift Savings Plan funds have a positive return.

The C fund, for example, had gains of 8.81% in March, 9.58% in April and 5.60% in May.

The fund with the largest gains in May was the I fund with a monthly return of 13.41%. That fund is now up 7.77% for the year--the best performance of any fund so far in 2009. But, to put a damper on any temporary feelings of elation this may give you, the I fund is still down 36.12% for the past 12 months.

The C fund is also up for the year with a positive return of 3.05%. Here is a chart showing how the C fund has performed over the past 12 months:

      

While the markets have been advancing in 2009, the only funds with a positive gain over a 12 month period are the G fund (3.37%) and the F fund (5.52%).

To put the recent returns in perspective, the S&P 500 index (the index on which the C fund is based) has returned 25% in three months. That is the biggest three-month gain for this index since 1938.

Of course, there would not be the opportunity for investors to make money if there were not reasons for concern. And there are still plenty of reasons for concern about future stock performance.

The dollar has just hit its lowest level of the year against the euro. Higher oil prices, the rapid rise in the value of commodities, the rising price of oil, and the large amount of debt being assumed by the federal government are raising concerns about inflation. Some countries, such as Australian, are following a much more conservative approach in the fiscal and monetary policies and the value of currencies in these countries is going higher while the dollar is falling.

Part of the financing of the rapidly rising American debt load is from the federal government just printing more money in large quantity. No one is certain how this will work in the longer term but fear of rapidly rising inflation in the United States in coming months and years will have an impact on investors. In other words, there is still good reason to be cautious in the allocation of your TSP funds despite the positive returns over the past three months.

You can see the monthly returns for all of your TSP funds as well as the yearly returns for each fund in the www.fedsmith.com/corners/tsp/