With news Tuesday that the Dow rose above 13,000 for the first time since 2008, TSP investors who “stayed with it” after the markets tumbled in 2008 have seen rewards, said Tom Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board, which oversees your Thrift Savings Plan.
“Back in 2007, at its height, it was as high as 1530 the S&P 500 was,” he said. “Then it dropped in 2008 and 2009 to a low of the high-600s.”
Those who stuck with it during the downturn were “buying low” in that period and are not benefiting from the market’s uptick.
Trabucco also discussed how closely the C Fund track the S&P 500. “It really does mirror the S&P 500 in returns and we’re rarely off by one 100ths or two 100ths of a point,” he said.
Investors in the S Fund have a lot to crow about as well. Over the last year, it has outperformed the Dow Jones Completion Index.
“In this case, we’ve been a little bit lucky,” Trabucco said. “I think the BlackRock has a very good optimization program, but it’s come out on our side. Remember, our goal is to track the index, not beat it.”
As far as recent trends in TSP transactions, Trabucco said interfund transfers have been relatively stable.
The spike in the Dow “may get people’s attention,” he said, but otherwise interfund transfers have been “very calm,” he said.
“I went through the numbers last week,” Trabucco said. “I’m seeing interfund transfers in the 4,000, 5,000, 6,000 range. That’s a far cry from the 40,000 interfund transfers we had in one day back in 2008 when everything was heading south.”
On a side note, Tuesday featured Trabucco’s last appearance on In Depth. He will retire Feb. 29 after 25 years at the board.
“It’s a bittersweet moment, I guess, but it’s time,” he said.