The TSP stock funds gave their investors gains over 1% for the week. Most of those gains came Thursday when the stock market rallied after a night to process the Federal Open Market Commitee's (FOMC) 0.50% rate cut on Wednesday. The S-fund led Thursday and through the week. It accumulated a weekly gain of 2.41%.
The FOMC chose to begin their rate-cut campaign with the more aggressive 0.50% rate rather than the more modest 0.25% rate-cut that was also considered. The stock price action immediately after the rate cut was turbulent with a quick spike and a quick hand back of those gains. The C-fund ended the day with a modest loss and the S-fund was flat for the day.
The real reaction came during Thursday's action where the indices opened higher, and prices climbed higher from there. Prices did pull-back from their highs before the end of the day Thursday and fell more on Friday. Heading into the new week investors still invested will have to consider whether they want to protect some of their new gains (if they hold through Monday) or have faith the fresh rate cut can hold the market near its highs.
The next FOMC meeting, and another rate cut, will not come until November 7th, two days after the U.S. elections. This market has spent the late summer months oscillating in anticipation for this last Wednesday's rate cut. How will it perform in the six plus weeks until the next? It will likely be pushed around by labor market data and election projections.
Here are the weekly, monthly, and annual TSP fund returns for the week ending September 20:
Over the last three months, the stock market has gone through oscillations providing entry opportunities to the under invested in early August and early September before surging higher. Investors who have been willing to buy into the weakness and sell (move to the G-fund) during the strength have thrived over these three months.
This is the sort of pattern that could warrant some profit taking, but is it too obvious to follow? If this market is taken over by the bulls, profit takers risk being left behind sitting in the G-fund.
Three-month chart of the S-fund index DWCPF
Two top members took that bet this week, and it gave them the two best returns for the week. Cowboyaug4 (2) and BorderBlade (5) both took profits Thursday while the S-fund index DWCPF rallied in the morning. Both members moved from 100% S-fund to 100% G-fund. This led to them sidestepping Friday's declines and left them both with a 3.17% return for the week. This was the first IFT of September for both investors, so they still have an opportunity to re-enter stocks before the end of the month if they see the opportunity.
2024 TSP Talk AutoTracker Leaders
The best returns in September all come from members who were underinvested (G or F-fund heavy allocations) early in September, avoided the early losses of the month, but took the buying opportunity to increase stock exposure. Some have moved to the G-fund again since, ready to put cash to work.
September AutoTracker Leaders
As a whole, the non-premium members of the TSP Talk AutoTracker (708) inched into the G-fund from the other TSP funds. The average allocation of the G-fund was alone in increasing over the week. We are seeing more profit taking than chasing among the TSP Talk Communtiy.
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Thomas Crowley
(TommyIV)
www.tsptalk.com
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The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
