Monthly Archives: March 2025

As most know, the last few days have been rather brutal in the markets.   On March 6, I submitted my change request to move to 100% G-Fund, which (shockingly) took effect on March 7.    Today, March 10, the Dow Jones index closed 890 points to the downside (losing up to 1,100 points intraday).   The S&P 500 index and NASDAQ also all closed lower:

Clearly, the reasons behind this remain “Tariff Talk” and inflation concerns.  As we know, tariffs could potentially cause inflation to tick higher.   They also could potentially have a COVID-like effect (remember grocery store shelves devoid of toilet paper) on products.   If Canadian lumber is shut off, American lumber producers cannot turn on the spigot full bore overnight…this will result in a supply shortage as production (supply) may not be able to keep up with demand.   High priced housing and new home construction (lack of…) may fix this problem in this particular example (because the lumber demand is softened) but you get the point.   So does Wall Street.   And they are “speaking” with their trading activity.

On Wednesday March 12, at 8:30 PM Eastern, the “CPI” will be released.  Often discussed here, inflation (a great post from 2018 is here) is also tied to interest rates.    If inflation is rising, the Federal Reserve may be inclined to PAUSE further rate cuts at the minimum, and at the worse, RAISE interest rates.    In sum, rising inflation is not embraced by the markets.   A quick search of business news reflects that 2.9% is the expected “Headline CPI” or “CPI” reading.  This is not “Core CPI” which is CPI without fuel and food.

Should we see CPI come in at 3.0%, the market will likely go down.  It WILL go down if CPI is 3.1, 3.2% or more.    Pray that does not happen.   CPI release can be found here

With that said, I conclude this post.   Tariff and inflation concerns rule the markets, and major fund managers are not “waiting to find out” and are exiting positions.

Have a great week and thanks for reading

-Bill Pritchard

Good Morning

Short post, I will provide a more in-depth explanation in a week or two.   Bottom Line, I am moving my TSP balance to 100% G-Fund.    The markets are NOT responding well to the tariff policies being pushed forward, and while the intent of them is correct (my opinion), the market has other ideas.   Some naysayers exist who are lambasting these policies, unfortunately we are seeing this reflected in the financial markets and retirement accounts.  I personally am not willing to roll the dice inside the casino called “Geopolitical global trade wars” as a retired guy.

Do what is correct for you, this is not investment advice.  My retired status, personal risk tolerance, higher priority on the stability and preservation of my money has resulted in this decision.   For further information on the G-Fund may be a tool for you, please see the official guidance at https://www.tsp.gov/funds-individual/g-fund/

Being in the G-Fund is not “leaving the TSP.”   The TSP is a gun vault, open the vault, and different shelves exist inside.   I am moving my stuff to the “G-Fund shelf.”

This is known as “reallocating” (indeed, the TSP site itself uses the word “Reallocation” of funds when changing funds), and there is nothing evil or “wrong” about reallocation.  Some links about this concept are below:

Click to access PAS-model-rebalancing.pdf

https://www.investopedia.com/how-to-rebalance-your-portfolio-7973806

https://www.forbes.com/sites/carriemccabe/2025/02/27/tough-markets-smart-moves-how-investors-are-reallocating-capital/

https://www.aaii.com/journal/article/why-we-dont-rebalance

Thank you for reading

-Bill Pritchard

Howdy Folks

Well what a crazy day February 28, 2025 was.  I will save the political commentary, but as we now know, the mineral rights deal between Zelensky and President Trump fell apart.   Market wise, then what happened?   The Dow Jones closed for the session 601 points up.   See Chart….note that media puts Zelensky leaving the location at 1:41 PM Eastern Time:

Can one conclude that the markets are “happy” about this event, or are they smarter then we all are and are happy about something else.  Time will only tell, and all we can do is trade the trend that the markets give us.   Sadly, the markets, which celebrated President Trump’s huge victory in November, have had some stumbling lately, largely due to inflation concerns.   My opinion is this deal will get done.

The S&P 500, my benchmark index, has drifted below (but gone back above), its 50-day Moving Average numerous times since December.   While not a “red flag” it falls in the category of “pay attention.”   See chart:

Recent Consumer Price Index (CPI) inflation data reveals that inflation’s downward trajectory (improvement) has flatted.   As we know, the Federal Reserves “target” inflation number is 2% (they use the PCE inflation data but its almost the same…).   In theory, as we arrive to 2%, interest rate hikes will stop.   As we do not arrive to 2%, some argument is out there that interest rate hikes will return.   So, the market is nervous about this.   Please see most recent CPI chart:

Tariffs, which, depending what time of the day you watch Bloomberg, are good one day, bad the next, and I am weary of the different academic theorists and talking heads.   In summary, if tariffs help US business, our stock market (in theory) will go up.   If damage and suffering is done, on the tariff pathway, our stock market will do down.   As the President is using tariffs as a tool in his diplomatic toolbox, some economic concerns exist.

According to the Federal Reserve Bank of Boston, an additional 25 percent tariff on goods from Canada and Mexico combined with an additional 10 percent tariff on goods from China could add as much as 0.8 percentage point to core (excluding food and energy) inflation.   Remember  my 2% comment above?   0.8 percent may not seem like a lot, but it moves the needle farther, not closer, to 2%.   Entire business school departments cannot agree on what will really happen to the stock market after tariffs, so losing sleep over this is a moot point.

That brings us to the S-Fund, which I am 100% invested in at the present time.   My “market calls” have an almost unblemished record, but strangely the I-Fund and C-Fund are outperforming the S-Fund for the last few weeks.   I will monitor the situation, but we may see the S-Fund log a month or two of negative, or poor, returns.   I am not moving anything yet, but dialing back a 100% commitment to S-Fund and instead choosing S and C, or C and I, may be something in my consideration for next month.    Just an FYI.

With that said, we conclude this update.  If the images or graphics do not appear, the direct link to this website is:  https://www.thefedtrader.com/

Thank you for reading !

-Bill Pritchard