Thursday's TSP scorecard

Stocks took a clear step down on Thursday, and nearly every TSP fund finished lower. The only exception was the G Fund, which edged up 0.01% to $19.4810, as it usually does.

The C Fund fell 1.65% to $107.5833. That lines up almost exactly with the S&P 500, which it tracks and which dropped 1.66%. The C Fund is still up 16.02% for the year, though its 5-day return slipped to -0.83%.

The S Fund had the roughest day, down 2.64% to $97.8677. It follows the Dow Jones U.S. Completion index, which covers mid-sized and smaller companies outside the S&P 500. Its 5-day loss is 2.31%, and its year-to-date gain of 8.26% is about half the C Fund's.

The I Fund slid 0.99% to $53.8284, just shy of the 1% mark. It tracks the MSCI ACWI ex-US ex-China index of foreign stocks. Even after Thursday, it is up 1.15% over five days and 28.37% year to date, the best showing among the individual funds.

The F Fund lost 0.28% to $20.7909. It follows the Bloomberg U.S. Aggregate bond index, and bond prices tend to dip when yields rise. They did rise, as covered below.

Moves over 1%

Three groups crossed that line: the S Fund (-2.64%), the C Fund (-1.65%), and the L Funds with the most stock exposure.

The L Funds are blends of the five core funds, so their results depend on how much stock each one holds:

  • L 2055 through L 2075: all -1.53%, the largest drop in the lifecycle group
  • L 2050: -1.28%
  • L 2045: -1.21%
  • L 2040: -1.13%
  • L 2035: -1.04%
  • L 2030: -0.92%
  • L Income: -0.43%

The pattern is orderly. The further the target date, the more stock in the mix, and the more Thursday stung. L Income, which leans on G and F, lost less than half a percent.

What moved IRA holdings

The broad market indexes told the same story. The index figures below are labeled as the prior session close in the data I have, but they match Thursday's TSP moves closely. The S&P 500 fell 1.66% to 6737.49, and the Dow dropped 1.65% to 47457.219. The Nasdaq Composite was weakest at -2.29% to 22870.359, so growth-heavy and tech-heavy holdings took the largest hit.

Vanguard Total Stock Market ETF (VTI) fell 1.77% to $329.91. It holds the whole U.S. market, so it landed between the S&P 500 and the Nasdaq. Vanguard Total International Stock ETF (VXUS) lost 1.09% to $74.99, a bit more than the I Fund's drop.

Bonds were steadier. Vanguard Total Bond Market ETF (BND) fell 0.29% to $74.27. The 10-year Treasury yield rose to 4.112%, up 1.16% on the day, or about 5 basis points. That is the same pressure that nudged the F Fund lower. The data doesn't say what set off the selling, so I won't guess.

What it means for your plan

One down day, even a sharp one, rarely changes a long-term outcome. The C Fund is still up more than 16% this year and the I Fund more than 28%. A 1% to 2.6% drop is the kind of move stocks make several times a year.

If you hold a L Fund, Thursday showed it working as designed: bigger drops in the long-dated funds, smaller ones near retirement. If you hold a mix of stock and bond funds in an IRA, the same logic applies. Your results will track the blend you chose, not one session.

This is general information, not personal advice. Your timeline, your goals, and how much risk you can stomach should set your allocation, not a single morning's headline.