Hi Laura. If I read your question right, the other funds in the TSP have got you a bit confused, so you’ve put all of your investment in the G Fund for the time being. I’ll take a crack at explaining the other funds.
The C Fund basically tries to replicate the S&P 500 Index. The S&P 500 Index is one of the most commonly used benchmarks for the overall U.S. stock market, and contains the stocks of 500 of the largest U.S. companies. Most of the companies are very recognizable names, such as Exxon, Apple, Microsoft, GE, Google, and IBM.
The S Fund tries to replicate the Dow Jones U.S. Completion Total Stock Market Index. This index contains the stocks of over 3,000 U.S. companies. It DOES NOT INCLUDE any the stocks that are in the S&P 500. Historically, this fund is more volatile than the C Fund, meaning that it has been prone to bigger ups and downs in its history than the C Fund.
The I Fund tries to replicate the Morgan Stanley EAFE Index, which is a commonly used benchmark for the international stock market. It does not include the stock of any U.S. companies. It also is historically more volatile than the C Fund.
The L Funds are designed to invest in an appropriate mix of the G, F, C, S, and I Funds for a given target retirement date. In other words, you pick the fund with the date that’s nearest your expected retirement date and they will take care of deciding how much of each of each fund to invest in. As time goes by, the fund you choose will automatically move towards a less risky mix of investments. I hope this is somewhat helpful in explaining the differences in the funds. As Jason explained, a general rule of thumb is to hold more stock investments when you’re young and, as you get older, increase your bond investments. But because everybody’s situation is different, it is not possible to say which choice is the most appropriate for you based just upon your age and contribution percentage. If you’re working with a financial planner or advisor, they should be able to help you. If you aren’t, and you would like to get more personalized investment advice, you could contact someone that is willing to work on an hourly or flat fee basis depending on your situation. Also feel free to contact me for more information or more explanation.
If you need a brief overview of the different TSP funds, I've posted a video on youtube that describes each of the funds that are available and some of the risk/reward characteristics of each fund. This should help you get a better grasp on the different investment options, so you can make a more informed decision about which funds to invest in.
You can find the video here: http://www.youtube.com/watch?v=igX1HuMQtqk
The typical rule of thumb that I use is 110 - your age = % of assets which should be in stocks. Your money is in anything but equities if you're in the G fund, since it's the government bond fund. How you want to differentiate between the other funds is a personal choice based on all sorts of factors which are inappropriate for a message board discussion. I will say this - the TSP expense ratios are the best out there. Unless you're going to have some non-traditional need for the money later (because withdrawing before traditional retirement age is a bear), then keep your money there. You can't find better expense ratio funds than the TSP funds. It makes me wish I had access to TSPs when I was in the Army!
Just one other thing as a point of reference. Realize that the G fund is a very unique fund (it owns bonds sold only to TSP). Because of these bonds, the G fund can provide medium to long-term interest rates without principal risk. To my knowledge there aren't many (or any) other bond funds that can do this. So, if you want to hold bonds in your portfolio...which may or may not be appropriate based on your risk tolerance and goals...tak a hard look at the G Fund.