Hello everyone
Today, Ben Bernanke stated that the Fed would likely start reducing its stimulus program. Markets closed down on above average volume, but above key trend lines.
I want to allow this week to “close out”, after which I will take a look at things and share my insights early next week. I might add that markets typically panic for a day or two, then re-stabilize, when bad news is released.
NOTE: My position is that the US Economy is a hospital patient, hooked up to life support (Federal stimulus/QE programs). Well, the patient is starting to get healthier, and it may be time to remove life support and allow the patient to breathe on his own. This is good for the patient, not bad (allowing him to breathe on his own). The patient will cough and moan and probably ask for that machine again, but big picture, if the patient starts breathing on his own again, and continues to do so, the patient will be stronger and better-off.
During the window of time, between when the doctor’s fingers hit the “OFF” switch on the machine, and when the patient starts to breathe unassisted, during this transitional period, the onlookers in the room will be worried, nervous, and probably praying. Right now, today, we are in that period.
I had dinner with a fellow subscriber last night who was TDY to my city, and this topic came up. My explanation sounds a little corny, I wish I could produce a Princeton PhD dissertation regarding financial friction and macroeconomics (someone else wrote it) , but my explanation gets the point across.
Lets see how the week finishes up, and expect another update soon. If you find this site useful or informative, and it has materially impacted your Thrift Savings Plan (TSP) performance, I ask that you share it with your friends and coworkers. I can’t place advertisements in the Wall Street Journal, and rely on word-of-mouth for building my subscriber base. Thanks for reading
– Bill Pritchard
TSP Allocation: 100% S-Fund but monitoring things closely over next few days.
