on January 31st we ended the First full
month of the New Year 2025 the Thrift
Savings Plan has done really well the
last two years as those who follow their
investments in the tsp you probably know
but just as a reminder of how good it's
done here's what happened in
2023 the C fund returned 26% and the S
fund returned
25% that was and standing year followed
by another outstanding year in
2024 the C fund had 25% return and the S
fund had a 177% return even the I fund
which often doesn't do as well as the
other core stock funds returned
4.27% for comparison the Gund uh
returned
4.4% in 2024 so what happened in the
first month of the New Year well you're
off to a very good start because for the
core stock funds the C Fund in January
returned
2.78% and for the 12-month return
26.3% s fund 4.9 almost 5% return and
the 12-month return
25.8% so the stock market is off to a
good year there's always at the
beginning of a new Administration some
questions some concerns What policies
are going going to be new what's
different how will these affect the
stock market one of the primary concerns
that has come about by investors with
regard to the Trump Administration is
tariffs what tariffs are going to be
imposed and we know there are some uh in
fact after the start market closed new
tariffs were imposed on a couple of
countries will this impact inflation if
it does obviously that in fact that
impacts inflation rates which infl
impacts stock market prices stocks don't
like a lot of high inflation if the
inflation rate goes up the stock prices
tend to go down but so far in January
you're off to a very good
start so we'll hope that this keeps up
and you have the same kind of year in
2025 that we had for the last two years
in the
tsp one of the things that happens with
the tsp and I've taken an interest in
following this just because the stock
market goes up it goes down that's just
the nature of it it always has it always
will it's not a risk-free investment now
some people say that the G fund is the
only fund they want to invest in because
it's the safest and it is in the sense
that the G fund doesn't go down the S
fund the C fund the I fund the core tsp
stock funds they go up they can go up
fast they can also drop fast and that's
part of being in a stock market the tsp
is continuing continuing to grow just in
the last year as an example right now at
the end of December the total tsp assets
were 963 billion so by comparison at the
end of previous year in December tsp
assets were 849 billion so it's gone
from 849 to
963 the largest 401K type plan in the
country is continuing to grow and as
mentioned earlier your assets are
growing very well especially those who
invested in the CNS stock funds because
we've been in a bull market for a couple
of years one of the questions that
sometimes arises is how much do tsp
investors trade in stocks do they react
differently if there's a bull market or
a bare market and the answer is they do
so we looked at the last couple of these
types of markets just to see what the
differences were we're currently in a
bull market and have been at the end of
2022 just as a comparison there were
$240 billion in the G fund at the end of
2024 there were 220 almost 228 billion
in the G fund so investors were
investing Less in the G fund which is
thought of because it is the safest Fund
in the tsp it doesn't go down it's only
available to federal employees in this
tsp plan but as more money was being
made in the stock funds people started
transferring money or investing their
new money into the stock funds which
makes sense so for comparison at the end
of 22 the CF fund had
$210 billion at the end of 24 it had 348
billion so a difference of $138 billion
that's throughout this bull market which
is still going on now one of the
questions is when it will end no nobody
can tell you that we just don't know
there's no automatic figure or divine
intervention that's going to tell you
when to start trading and expecting the
stocks to go down I don't know if you
don't know even professional Traders can
guess they have models they look at but
they're off and wrong for comparison how
did tsp investors react in a bare Market
the last one I looked at from December
20 31st 2021 through October 31st 2022
that's pretty close to the length of
that be Market at the start of that the
tsp G fund had about $211 billion at the
end of that the G fund had almost $30
billion or $240 billion in an increase
of about 30 billion the C fund lost in
that same period of time roughly 57
billion so investors as the bare Market
went on put more money in the G fund now
what we don't know is how many of these
got it right my guess is nobody can get
it right because you have to do it twice
you have to know this Market is about to
end and another one's going to start and
when does the new be Market or the new
bull market change you don't know if you
happen to get it right you made a lot of
money fit Smith obviously doesn't tell
people how to invest or not financial
advisors there are some excellent
financial advisors around that will help
you a lot of times what these folks will
say is set up a portfolio follow your
plan and don't try to guess the market
because in the long run it doesn't work
out the Gund is by far the safest and
what tends to happen is as people get
close to retirement or in retirement
they don't want to take the risks they
don't have 20 or 30 years for any losses
to build back up younger investors when
you look at the life cycle funds those
are primarily in stocks the G fund is
not in stocks at all so when is safer
one is more risky one will give you more
money profits over the long term but you
might lose money in the short term so
you pay your money and you take your
chances 2025 is off to a very good month
for the tsp we hope it continues
fedsmith publishes the results at the
end of each month and even throughout
the month for those who want to keep
keep it up keep up with their Returns on
a daily or monthly basis we appreciate
you listening to this video we hope it's
helpful and we wish you the best of luck
if you want to look at more detail uh
check out the fedsmith website at
fedsmith.com we have articles there on
the tsp that will provide more
information and some of the charts that
I mentioned here some of the data is in
that article thank you for listening