If you found this page while your account is falling, start here: you do not have to decide anything today. The urge to move everything to the G Fund right now is the most natural feeling in investing, and acting on it at the moment it peaks is the most reliably expensive mistake TSP investors make. This page is the plain-English playbook: what drops usually are, what panic selling has actually cost, the rules that protect you, and the one-page plan to write so the next decline finds you prepared instead of searching.
Make no IFT within 48 hours of the headline or the balance check that scared you. Not because acting is always wrong, but because acting from fear is. Fear peaks fast and fades fast; the market will still accept your transfer in two days, and the noon Eastern cutoff means today's panic gets today's price whether the panic was wise or not. Every rule that follows works better on the other side of 48 hours.
Declines are not anomalies. They are the operating rhythm of the stock funds. Drops of 5% happen several times in a typical year. A 10% correction arrives in most years. A 20% bear market shows up several times a decade, and the C Fund has repeatedly fallen much further than that before recovering to new highs, including a 37% loss in 2008 alone. Every one of those declines, so far, ended the same way: at new highs, for the investors still holding or systematically re-entering. The decline you are watching is almost certainly not the exception; it just feels like it, because the current one always does.
The classic sequence has three acts. The fall, during which you hold on. The capitulation, usually near the bottom, when holding becomes unbearable and everything moves to the G Fund. And the recovery, watched from the sidelines, because nothing feels as dangerous as buying back into a market that just hurt you. The seller who capitulated in early 2009 locked in the entire 2008 loss and then missed the 23% rebound year; the buy-and-hold investor recovered, and the panic seller often never fully did. The cost is not the decline. Everyone gets the decline. The cost is being absent for the recovery, and recoveries are violently front-loaded: a handful of the best days, which cluster inside the worst stretches, carry a shocking share of the market's long-term return.
The TSP's own rules quietly raise these stakes. You get two unrestricted transfers per calendar month. A panicked move out spends one. Nerve recovered two weeks later, the move back spends the other, and a second scare that month finds you with nothing left but the one-way door to the G Fund. Scarce moves deserve better reasons than a headline.
Yes, and honesty requires saying so, because this site's entire service is built on the belief that risk can be managed rather than merely endured. The difference between defense and panic is not the destination; it is the trigger. A move to safety made because a methodology, a rule, or a plan you wrote in advance said so is risk management. The identical move made because your stomach said so, tonight, is panic wearing a strategy's clothes. If you cannot point to the rule that fired, the move is a feeling. The playbook below exists so that next time, you can point to the rule.
Historical figures from published TSP fund returns and our verified record, 2005 to present, shown in full on our returns page, including the years we underperformed. Education, not personalized advice.