It was a good year to pad your TSP retirement savings. That was especially true over the last couple months of 2023. The 721 active non-premium members of the TSP Talk AutoTracker finished 2023 with a combined average return of 15.5%. That is a respectable return yet an underperformance against any of the three TSP stock funds (C,S,I). Arguably, buy and hold was the strategy this year, but this would not have felt to be the case during the end of October.
On October 27th, the C-fund held a 2023 gain of 8.6%, the S-fund was up only 0.3%, and the I-fund was up 0.8%. Buy and holders would have felt less confident with their lack of activity, especially those outside of the C-fund. But nobody could have predicted the explosive gains that would accumulate through the rest of the year among all three TSP stock funds. It then became the underinvested and those who took profits too early whom would feel left behind.
Each of the C, S, and I-funds would reach a new 2023 high in this final week of the year, but the C and S-funds showed some weakness on the final day as some investors would take some profits for the year. The success of November and December is unsustainable and soon enough there will be a wall of profit-taking that grows into capital protection. However, that same argument was valid at the end of November and prices carried ever higher.
This week was also the end of a year-long race to the top of the TSP Talk AutoTracker. The best return of the year would go to yanni123 on the last day of the year when their 100% I-fund allocation led to them sneaking by the long-time top placeholder thetsai who held 50% S and 50% I-fund. Both members held gains over 36% for the year. Yanni123's crown would be challenged due to an extra IFT they used in April, but their success this year was nonetheless impressive and respect is due. The difference between the top two members' 2023 returns was just 0.43%. This shift to the I-fund was shared among the top ten in the last week, a bet that paid off for some who got in on time.
See the full list of 2023 TSP Talk AutoTracker winners.
Only twenty-three members would end the year with a return beating the C-fund's 26.25% 2023 return. Yet 131 members outperformed the S-fund's 25.30% 2023 return in the TSP Talk AutoTracker.
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Here are the weekly, monthly, and annual TSP fund returns for the week ending December 29:
The C-fund (S&P 500) ended the year on top among the other TSP funds. It ended 2023 with a 26.25% gain, but the gains were not easy. Well, they were easy if you held stocks in the last two months of the year. The C-fund gained around 16% from its low at the end of October to its closing price on Friday.
Aside from the bull parade at the end of the year, the C-fund had months-long swings in both direction. One would think this would be a swing traders paradise, yet only 23 members were able to outperform the C-fund in the 2023 TSP Talk AutoTracker.
The choppy nature of this year's action made timing this fund with just two IFTs a month to work with ever so difficult.
The latest struggle is when to sell. Some sold too early and have been left in envy of those who held through December. But the market showed some weakness on Friday to close out the year. Will the C-fund shift its behavior in the New Year?
The S-fund may have underperformed the C-fund for all of 2023, but it was the fund to be in these last two months of the year. After nearly falling back to even for the year in late October, the S-fund would go on to accumulate a 25% gain over the rest of the year.
The S-fund pulled back over 1% on its last trading day of 2023. This may be a sneak peek into the new year. The performance of the S-fund in its current run is unsustainable, so profit-taking may take over this fund in the first month of 2024.
The main difference between the C-fund and the S-fund is the C-fund has recently established new highs, whereas the S-fund would still need to rise more than 17% to reach its highs.
Like the C-fund, the I-fund ended the last two months with a gain of around 16% from its late October lows. However, the I-fund lagged the C-fund earlier in the year leaving it with the lowest return among the TSP stock funds for 2023.
But, the I-fund suddenly became a hot destination for active TSP Talk AutoTracker members in the last week of the year, and that was most true among this year's top performers. The hunch to move to the I-fund turned out to be valid and it propelled some higher in the standings after the I-fund led the TSP funds for the week with a gain just short of 1% over the four days.
Bonds were having a tough year as yields were being pushed higher by the Fed raising their Fed fund rates. The F-fund entered negative territory for the year by the fall trading, but bond prices rallied alongside stock prices in the last two months of trading. A 9% gain over November and December led to a 5.6% gain in the F-fund for 2023. That was padded by this week's 0.33% gain in the F-fund.
The bond ETF BND spent the last two weeks of 2023 trading at new yearly highs.
Good luck and thanks for reading! We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at TSP Talk - Market Commentary. If you need some help deciding what to do with your account, perhaps one of our premium services can help.
Thomas Crowley
(TommyIV)
www.tsptalk.com
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The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
