Hello Everybody
My personal TSP Allocation remains 50% C-Fund and 50% I-Fund.
September, historically a “down month”, was indeed positive, with the last trading day resulting in an All Time High (ATH) attained by the SP 500 Index, reaching 2519.44
We have witnessed fairly decent accumulation since mid-September, likely the market’s positive response to President Trump’s tax and deregulation plans. We are also witnessing an improvement of the global economy, which helps everybody. The next event watched by the market is a possible change to the Federal Reserve Chairperson, reportedly this will be decided by the end of October, as President Trump is reportedly considering not to renew Chairwoman Janet Yellen.
While official TSP data is not in, we will likely see that the S-Fund was the top performer for the month, with the C-Fund and I-Fund lagging, however still positive. My personal conviction that the ideal allocation of 50/50 C-Fund and I-fund may change, I will allow October to come and close out, and re-assess my allocation. To be clear: “All stock funds are doing great” and it is rather challenging to make performance tweaks to any combination of stock funds. Note that the I-Fund is leading and C-Fund is next best performing, when considering both YTD and past 12-month performance. Again, all stock funds are doing fine. Observe that I am not in the G-Fund, as I see no warning signs ahead or speed-bumps in the road, and thus feel the protection of the G-Fund is not needed for my TSP right now.
Let’s take a look at some charts, both of the SP 500 Index and of the SPY Exchange Traded Fund (ETF), which is useful to monitor volume action.
Evident in the charts is the clear up-trend, again, a rare event in September, a historically negative month. Also apparent is “more up days than down days” a rather Basic-101 analysis device however sometimes basic is better than not.
I sometimes get asked if I am concerned about the I-Fund being impacted by events in Asia. This is a great question, but if we look at the South Korea KOSPI Index (“their SP 500”) and Japan’s Nikkei Index (the largest Asian stock market is in Tokyo, Japan…also the country whose airspace was penetrated by North Korea missiles…)- their markets do not seem too worried. Lets take a look:
No major downturns or sell-offs in those markets, both next door to North Korea.
As such, I remain in I-Fund and personally am not too worried about things in North Korea, as they relate to my TSP.
With that said, I have no other news to report….I am very pleased with the September performance and as stated above, my TSP remains the same. I typically re-assess my allocation every 90-days, we are past that point now. I prefer to let October come and close prior to making any changes, remember I look at things on a 60-90 day cycle (typically…not always…) versus fret over daily volatility.
Hope everyone is doing well…I will post another update when warranted, for now let’s step back and watch how October plays out.
Thanks for reading….
-Bill Pritchard
