Good Afternoon
I hope everyone’s February is going well….I wanted to update everyone, now that we are mid-month, as to how things are going. Let me mention that this month as we all know is the shortest month of the year, and thus the shortest trading month, with the fewest days that the stock exchanges are open for trading. As such, this month is less indicative of “rest of the year” type behavior for the markets. February historically mirrors what happened in January for the first two weeks, then goes flat for the rest of the month. So I guess what I am trying to say is that if the next two weeks are lackluster, that is “ops normal” for February and nothing to worry about. If the markets go up, well great, I won’t complain.
Since pictures are worth a thousand words…I have attached a chart of the SP 500 index, which I use to measure the behavior of the markets. As I have said in prior posts, I use this index because it is composed of 500 stocks (hence the “500” in the name) from both the NASDAQ and NYSE exchanges. I don’t use the Dow Jones Index as it is only 30 stocks, nor the NASDAQ as it is mostly tech companies and/or smaller up-and-coming companies which are more volatile and do not necessarily reflect the big picture. So, for me, the SP 500 is my index. Lets take a look:
As you can see, the first of the year witnessed a huge uptick in the index on above average volume, thus propelling the index into a new up-trend, which continues to present date. I see no indications that the index will “correct” or “drop” even though some reported experts in the media claim this will happen.
Also note that my personal opinion is that the Sequestration issues and Continuing Resolutions issues which will be faced in March, will not drastically impact the markets. This is different from the Fiscal Cliff, in which our country’s financial system and reputation was facing downgrade by rating agencies and deterioration in the opinion of world leaders. It is my opinion that Seq / CR issues are largely a “government event” and market performance is not dependent on resolution of these issues. In contrast, the Fiscal Cliff situation could have resulted money being withdrawn from US investments, which would have sent the markets lower. Obviously this is all my opinion.
Enough of all that, the primary question is “how is the TSP doing and where should I be.” The answer to that is the TSP is doing very well, the S-Fund is still the leader of the pack as of 02-17-2013, and I am personally still 100% S-Fund. I see no hiccups or problems brewing which would affect things. As it stands now, the S-Fund will probably outperform the rest of the funds when the month is over.
Again, I am 100% S-Fund. That’s all I have for this update, thank you for reading. If you find the information on this site useful, please forward this to anyone who may benefit, and encourage them to sign up for updates via email.
Thanks for reading
– Bill Pritchard
