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The stock funds in the Thrift Savings Plan moved up again in
November.
The C fund was up 6% for the month, followed by the S fund with a gain of
3.85% and the I fund with a gain of 3.16%. The C fund has now had a positive
return in eight out of the last nine months (See the
average monthly TSP returns)
For the year-to-date, the I fund is ahead of all other TSP funds with a gain
of 28.20%. The S fund is up 26.53% and the C fund is up 24.26%.
So what is going on in the stock market?
There were plenty of reasons for the stock market to have gone down.
Unemployment is at 10.2% and estimated of the economic growth in the third
quarter went down. Also, an event in Dubai rattled investors of the Thanksgiving
holiday as the largest conglomerate there said it would stop paying its debts
for awhile. That created concern that there are more state-sponsored
organizations that may implode.
But, on a more positive note, a forecasting gauge of housing-market activity
climbed to its highest level in more than three years in October, and spending
on construction in the U.S. in October also went up.
The real reason may be staring us in the face: money is now cheap and
investors are trying to get a better return on their money by investing in
stocks. The Federal Reserve has kept interest rates down to almost zero and the
price of a two-year Treasury note is now providing a rate of 0.671%.
The G fund is doing better than that as it was up 1.26% for the month and is
up 2.72% for the year as of the end of November.
And, what the charts below and the monthly figures do not reflect is the
gains that have occurred since November 30th as stocks are now up to their
highest level in 14 months.
So, what does the future hold? Here is an observation from the president of a
portfolio management firm as quoted in the Wall
Street Journal on the run-up in stock prices so far in 2009: "We still have
a day of reckoning ahead, but that day is being delayed for now."
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