Updated November 9, 2026 · Independent research from official TSP share prices. Not affiliated with the TSP or FRTIB. We sell no signals and take no money from timing services.

Should you move your TSP to the G Fund when the market drops?

Short answer from the data: We replayed all five C Fund drops of 15% or more since 2003 on official TSP share prices. Someone who moved everything to the G Fund at a 15% drop and stayed there was behind someone who did nothing in 4 of the 5 drops, two years after the peak. The one exception was 2008. Even the smarter-sounding plan, "come back when the trend turns up," was behind in all 5.

The test

Each case starts with $100,000 in the C Fund at the market's peak. When the C Fund closes 15% below that peak, everything moves to the G Fund, executed at the next price TSP would actually give you under its noon rule. We measure the result two years after the peak and compare it to simply staying in the C Fund.

Drop	Moved to G	Stayed in G	Came back when trend turned up*	$100k if you did nothing
2008–09 financial crisis	Jan 23, 2008	+26.5%	−5.7%	$71,953
2018 Fed selloff	Dec 21, 2018	−26.6%	−11.6%	$116,335
2020 COVID	Mar 10, 2020	−33.5%	−5.3%	$131,129
2022 inflation	May 10, 2022	−11.8%	−6.1%	$101,311
2025 tariff shock	Apr 7, 2025	−27.7%	−13.7%	$122,503

Percentages are how far ahead or behind the "did nothing" C Fund balance each plan ended. *Returned to the C Fund when it closed back above its 200-day average. The 2025 case is measured to November 2026, not a full two years. Full table, including waiting 6 or 12 months and waiting for the old high, in the panic history.

In dollars, the 2020 case is the starkest: the person who moved $100,000 to G on March 10, 2020 and stayed had $87,136 two years later. The person who did nothing had $131,129.

Why moving out usually hurt

The best days come during the worst stretches. All 10 of the C Fund's biggest one-day gains since 2003 happened while it was at least 10% below its high, most of them in the middle of 2008 and 2020. A dollar left in the C Fund from mid-2003 grew to about $11.91 by November 2026. Miss just those 10 days and it grew to about $5.33.
You have to be right twice. Getting out is one decision. Getting back in, usually while the news is still bad, is a second one, and that's where most of the damage happened in our test.
The rules slow you down. A transfer submitted after noon Eastern gets the next business day's price, and you get two unrestricted transfers a month (rules here). In March 2020 the C Fund moved −9.5%, +9.3%, −12.0% and +6.0% on four straight trading days. One day's delay could swing a move by 10% either way.

When moving to G did help

In 2008, the drop kept going for more than a year after our 15% trigger, and the two-year window ended with stocks still far below their old high. Long, deep crashes are where getting out pays. The problem is that nobody can reliably tell at a 15% drop whether it's a 2008 or a 2020. Five drops is a small sample, and this is history, not a forecast.

What people do instead

This is general information, not advice for your account. Common approaches that don't depend on guessing the bottom:

Pick a mix you can live with before the drop. If a 30% fall would push you to sell, that's a sign the mix is more aggressive than you can hold. Changing it on a calm day, on purpose, is different from fleeing during a panic. In our test, simply holding the L 2040 Fund the whole time beat bailing to G in 4 of the 5 drops, and it never ended more than 10% behind the C Fund.
Keep contributions going. New money buys shares at lower prices, and agency or service matching keeps coming either way.
Decide your rules in writing ahead of time, and give a copy to your spouse. That's what Tie to the Mast is for: a free letter from you to yourself, delivered automatically if the market falls 20%.

Moved money during a drop? Replay your own transfers free and see what it cost or saved →

Sources and method