Discuss Market Comments 06/02/11

What a difference a day makes - Yesterday's commentary talked about the market's ability to shake off bad news. Apparently there was a line crossed yesterday as the economic news was excessively bad and the rug came out from underneath the indices. The Dow dropped 280-points...

Current Daily Market Commentary

Market Commentary for 6/02/11

 

[Myemal]

What the heck happened overnight for the F fund?

 

[tsptalk]

What do you mean? What are you seeing?

 

[Myemal]

http://finance.yahoo.com/q/bc?s=AGG&t=5d

ie., the dramatic drop between yesterday's close and today's open
Thx

 

[tsptalk]

Oh, I see. It looks like it paid a dividend yesterday...

http://finance.yahoo.com/q/hp?s=AGG+Historical+Prices

 

[Myemal]

ah k thx

 

[dpmp]

I was surprised to see the market rallied on the face of bad news on Tuesday. Then, it was the "rumor" on good job number; surely sounded like a last scam before the dump. And it was. I doubt tomorrow will bring a good job number neither. ISM dropped, how could job number be good unless it's McDonalds? And I won't bank on McJobs to lift the economy.

 

[EmoDx]

So when the AGG pays out a dividend, it pays directly to the F fund, and the TSP then credits that out to the F shareholders? On the ticker tape it looks like we take a haircut but on the TSP financial summary we would break even from the dividend pay out?

So in a sideways market you could buy a dip or even flatline right before dividend payout, collect the dividend, wait for the dip buyers/financial institutions to plow money in right at or after dividend payout and then jump into which over other fund looks good for the majority of the month?

Has anyone modeled this tactic to see how it performs over a bond bull and bear market? Seems to me if you knew how the AGG performs in certain market conditions, you could have conditions where you are exposed to bonds during payouts and the G or Equity funds for the rest of the month. +%1 over 20~30 years is a substantial amount of money. Any info is appreciated.

Emo

 

[tsptalk]

So when the AGG pays out a dividend, it pays directly to the F fund, and the TSP then credits that out to the F shareholders? On the ticker tape it looks like we take a haircut but on the TSP financial summary we would break even from the dividend pay out?

That's correct. I'm not sure about your other question as I haven't given it much thought. It maybe something to look into though.