Federal investors with part or all of their retirement nest egg in the C-fund (stock index) of the thrift savings plan continued to get double-digit good news on their returns.

For the 12-month period that ended in November, the C-fund returned 20.79 percent. The C-fund is one of three plans now available through the thrift savings plan, the government's in-house 401(k) plan.

The C-fund, like many other index funds, rises and falls with the Standard & Poor's 500, which tracks the nation's biggest companies. The most recent 12-month snapshot shows where the market has been--not where it is going. Its ups and downs also show how difficult it is to attempt to time the market and guess when it has peaked (to sell high) and when it has bottomed out (to buy low).

For example, try predicting the long-term direction of the market based on relatively short-term performance:

In the past 12 months, the C-fund has had five bad months and seven good months.

In February, the C-fund was down 3.09 percent. In May, it was down 2.36 percent. In July, August and September, it was down 3.14 percent, 0.5 percent and 2.78 percent, respectively.

But the fund had gains of 5.76 percent in December 1998, 4.19 percent in January, 3.99 percent in March, 3.86 percent in April, 5.54 percent in June, 6.34 percent in October and 2 percent in November.

The problem with stock market returns is that they are a done deal by the time you get the information. It is like taking a drive and looking only through the rearview mirror. Returns are interesting and can be helpful (or not) in charting a course. But they do not show what lies ahead.

The three tax-deferred investment options now offered by the federal 401(k) plan are the C-fund, the F-fund (bond index) and the G-fund (Treasury securities). Most of the more than $91 billion invested in the savings plan is in the C-fund, with most of the rest in the G-fund.

For the 12 months that ended in November, the F-fund was down 0.1 percent, and the G-fund returned 5.88 percent.

For 1998, the C-fund's return was 28.44 percent; the F-fund's, 8.7 percent; and the G-fund's, 5.74 percent.

Money invested in the C-fund since it became available has grown four or five times as much as money invested in the F-fund or G-fund.

Some high-income workers who are enrolled in the newer Federal Employees Retirement System (as opposed to the older Civil Service Retirement System) and who have invested exclusively in the C-fund are fast approaching account balances of $500,000.

New Risks and Rewards

Beginning in May, the savings plan will offer two new investment options: an international stock index fund and a small capitalization index fund. Both have the potential for high-risk, high-reward investing. The C-, F-, and G-funds will continue as options.

Also in May, interfund transfer requests will be processed each business day, according to the Federal Retirement Thrift Investment Board. Currently, those requests (to move money from one fund to another) are processed once a month. It can take two to six weeks for a transaction to be completed.

The thrift board says that although daily valuation will virtually eliminate the wait between interfund transfers, it is not intended to accommodate people who believe they can time the market by regularly jumping from one fund to another.

The recent performance of the C-fund, as indicated above, shows the volatile nature of the market. That is why the thrift board and most financial planners recommend that people who are investing for retirement adopt a long-term strategy.

Health Insurance Etc.

At 9 a.m. tomorrow, WUST radio (1120 AM) will have a special call-in show on the federal health insurance program. The health insurance open season ends Monday. Bill Smith, insurance expert for the National Association of Retired Federal Employees, will answer callers questions about insurance plans. At 10 a.m., benefits specialist expert Jerry Sandaker will talk about how taxes and estate planning fit into the federal benefits package.

Departure

The Justice Department's Drema A. Hanshaw is retiring after nearly 35 years with Uncle Sam. She runs the administrative staff of the department's Office of Information and Privacy, which does a booming business handling freedom of information requests.

Mike Causey's e-mail address is causeym@washpost.com