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Back in December 2005, there were about 218,000 Thrift Savings Plan
(TSP) plan participants who owned one of the TSP's lifecycle funds. In
2005, the crashing stock market was still in the future and all of the
TSP funds were making money. In fact, the C fund went up about 16% more
in 2006 and up another 5.5% in 2007. (Check out the
annual return for all of the TSP funds.)
The number of lifecycle fund participants has continue to go up. At the end
of 2007, there were about 566,000 TSP investors in one of the L funds. The C
fund dropped about 37% in 2008 and the number of participants in the lifecycle
funds has continued on an upward trend. At the end of April, there were almost
695,000 participants in one of these funds.
In fact, says the TSP board, a record 17% of TSP investors who are under the
FERS system are now invested in one of the lifecycle funds as of April 30th. 11%
of TSP investors who are under the CSRS system have money in at least one of the
lifecycle funds. That 11% figure is also a new high for CSRS employees but that
level was reached in March 2010.
In April, TSP investors withdrew more than $1.3 billion from the G fund and
another $277 million from the F fund. These withdrawals were on top of about
$1.3 billion that was also withdrawn in March from the G fund.
Where did that money go?
A lot of it went into the C fund which saw an influx of $316 million in April
and the S fund which received $958 million in the same month. Investors were
apparently hoping that the rise in the stock market would continue in May. With
the benefit of hindsight, we know that the C fund actually declined about 8% in
May while the S fund dropped 7.5%. (See
TSP Funds Take a Hit in May)
While the transfer may still prove profitable in the near future, so far in
June, both the C and S funds are down. While the month is still young, the C
fund has declined about 10 cents per share and the S fund is down about 45
cents.
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