TSP rallies in December

All the funds in the Thrift Savings Plan finished December with solid gains, bringing hope to some investors who experienced significant losses in 2008.

The I Fund, which invests in international stocks, posted the highest gains -- 7.66 percent -- in December, among the 401(k)-style plan's five basic investment options. December's growth alleviated the fund's tough 12-month loss of 42.43 percent.

The S Fund, which invests in small- and mid-size companies by tracking the Dow Jones Wilshire 4500 Index, grew 4.68 percent last month. The fund's overall value is down 38.32 percent since December 2007.

Fixed-income bonds represented in the plan's F Fund earned 3.73 percent last month. The fund also posted the strongest gains for the year, at 5.45 percent.

The C Fund, composed of common stocks on the Standard & Poor's 500 Index of the largest domestic companies, rose 1.07 percent last month. But the fund experienced significant 12-month losses of 36.99 percent.

The TSP's most reliable investment option, the government securities (G) fund, posted minimal gains in December, rising 0.24 percent. The fund had a 12-month increase of 3.75 percent.

The TSP also has life-cycle options, a blend of the five basic funds that automatically grows more conservative as investors near retirement. Those designed for younger employees earned the most in December, because they invested more heavily in the I, C and S funds.

L 2040, intended for employees with a target retirement date around 2040, increased 3.63 percent; L 2030 rose 3.24 percent; L 2020 gained 2.82 percent; and L 2010 increased 1.66 percent. The L Income Fund, designed for employees with planned retirements in the very near future, gained 1.21 percent for December.

All the L funds lost value in 2008, however, with those designed for younger employees posting the steepest losses. L 2040 lost 31.53 percent; L 2030 fell 27.5 percent; L 2020 was down 22.77 percent; L 2010 dropped 10.53 percent, and L Income fell 5.09 percent.