Hello Folks
Hope everybody had a good July 4th weekend and post holiday week. I am quite pleased to report that my decision to remain 50% S-Fund and 50% C-Fund, in light of BREXIT sell-offs and panic, has apparently (so far) been the correct decision, as the markets have performed very strongly since my June 29 post. As a matter of fact, the SP 500 Index hit an intraday high of 2131.71 on Friday July 8, 2016. This is very close to a historical All-Time-High (ATH), with the benchmark being 2134.72, which was set on May 20, 2015. Once it breaks this level (we can call it “2135“), the index will be at a record ATH. Let’s take a look at some charts:
Note that on Friday July 8, the often watched (by the financial press) Dow Jones Index gained 250 points. Anytime you have such a performance on a Friday, which is the last trading day before the weekend, it is a very positive sign. To be fair, all indexes gained, and this was largely fueled by the June Non-farm Payrolls report, which revealed a gain of 287,000 jobs, which was much more than an expected gain of 170-175,000 jobs.
It would appear that BREXIT has turned into a non-event, (FORGET-IT?) with the US markets rising strongly in past sessions, on above average volume. The day after the affirmative BREXIT vote, the markets crashed hard, and on June 24 I posted the following comments:
“…I personally am not leaving stock funds, most reactions to this are panic selling and I anticipate things will stabilize in one to two weeks….”
In a not uncommon event on this (free) website, my analysis was spot-on, 100% accurate, as the markets indeed stabilized (and recovered), and two weeks later (July 8 is 14 calendar days, or two weeks, after June 24), the markets are closing at new highs, having recovered all BREXIT losses.
This price behavior, and the above average volume, is easily seen via analysis of the SPY Exchange Traded Fund, which is a proxy for the SP 500 Index. Charts below:
Of all the TSP stock funds, I anticipate strong monthly July performance out of the S-Fund and C-Fund, assuming the market’s behavior continues. As of present, the S-Fund is tracking as best monthly performer, C-Fund is next, and I-Fund is last.
That is all I have for now, my personal TSP contributions and allocations remain 50% S-Fund and 50% C-Fund.
Thanks for reading, talk to you soon…
-Bill Pritchard
