As most are aware by now, both the Senate and the House have agreed to raising the debt limit and opening the federal government. This shutdown was the second longest (I believe) in history, with the longest one being three full weeks, under Bill Clinton.
Thankfully, the Tea Party / Ted Cruz et al. did not throw any wrenches into this, and it was passed, and before the Oct 17 deadline. No last minute hiccups, and the power did not go out in DC tonight prompting the House to cancel the vote.
The Asian markets responded well to this, with the Japan Nikkei 225 Index going up 160 points. SP 500 Futures are somewhat flat, which is surprising, but they are not down, so I am happy about that. The last couple of days the markets have closed higher each day (as many of you have reminded me…) albeit on reduced volume, indicating that folks were not jumping into the pool head first but sticking one foot into the water at a time to test things out.
The CR will fund the federal government until Jan 15 2014, getting agencies (and their employees) thru the major holidays. The debt ceiling is raised until February 7 2014.
Based on the overwhelming positive news regarding the Debt Ceiling agreement, which was really the only thing lingering in the skies over the markets, and the impossibility (now) that a last minute problem would trip things up, I am returning to 100% S-Fund. My review of past market days and analysis reflects that S-Fund has a high probability of strong returns for the time being. Asian market’s positive response to this reflects they are obviously pleased that some stability is back, as Asia owns a lot of US debt and they have a lot on the line regarding the Debt Ceiling. I also plan to adjust my personal stock portfolio to reflect long/buy holdings which would benefit from a new uptrend.
Six trading days have passed since my October 8 posting regarding my move to G-Fund. Now that the markets are apparently on the path upward, I would not nickel and dime yourselves over six days of not being in the stock funds. Let’s conduct an honest self-reflection: a lack of agreement on this debt ceiling would have been a bloodbath, and by being in G-Fund, we were safely tucked into bed under our blankets, with no risk exposure. If you can minimize your losses, the gains will take care of themselves. And if you have subscribed to this site, you likely have been in the one fund out of ten that was the top performer. This does not happen by magic or lucky guesses. Please note that the YTD best performing fund, per the TSP site, has been the S-Fund, and this site (and to my knowledge, no other site, to include the paid subscription sites) has kept people in the S-Fund almost the entire time, with a few short-lived jumps to G-Fund along the way. Thank you for the interest, and you can count on the accurate and unmatched market analysis to continue.
Thanks everybody
– Bill Pritchard
