The weekly returns do not give credit to the wild swings in last week's market. The accumulative 0.02% loss in the C-fund last week included a 2.99% loss on Monday and a 2.31% gain on Thursday. Some opportunistic investors were attracted to the week’s early weakness and increased stock exposure which led to healthy profits. Others took shelter in the G or F-fund early only to lock in losses and miss the recovery.
Here are the weekly, monthly, and annual TSP fund returns for the week ending August 9:
Ten members of the TSP Talk AutoTracker, including myself (tommyiv with 1.10%), maneuvered weekly gains over 1% this week, all of whom had increased their stock exposure before Thursday’s rally. Silver2828 was the best to do it and accumulated a 3.1% gain for the week.
As noted in the Last Look Report, Silver2828 made their first move since January by shifting from the G-fund to the C-fund on Monday. After gaining 3.1% over the next four days, they moved back to 100% G-fund on Friday. Silver2828 now holds the best return for August at 3.12% and has climbed into the top 300 in the 2024 AutoTracker standings with a 6.93% return, despite having only four weeks of stock exposure this year."
A total of 20 TSP Talk members were able to outperform all of the TSP funds this week, beating the I-fund’s 0.28% return. But more left stocks behind early in the week to protect their money, and missed Thursday’s gains, the best C-fund return since 2022. It is clear to see in retrospect that no move was better than a defensive move, but you cannot blame these investors during the selloffs.
Stocks were already falling in the previous Thursday and Friday action, and a rate hike by the Japanese Central Bank shook the global market Monday and accelerated the losses. Those who held through Tuesday thought they were getting a 2% rebound, but half of the gains were erased by the close. On Wednesday, stocks held gains at the TSP trade deadline only to reverse again at midday to leading to a 0.77% loss in the C-fund and a 1.14% loss in the S-fund.
Before Thursday’s rally, the market action was not attractive, and it took stomach to buy into. Those holding stocks Thursday were rewarded because of a better-than-expected jobless claims report that softened the jobs market fear that initiated selling after the July Jobs Report the previous Friday.
If the July Jobs Report and Thursday’s jobless claims were responsible for the larger swings in the market, then get prepared for more next week. Economic data is lined up Tuesday through Thursday that has potential to excite the market in either direction.
Tuesday: Producer-price index
Wednesday: Consumer-price index
Thursday Retail sales and the weekly jobless claims
‘An economic recession is coming, and the Fed can’t stop it’. This is the new narrative that helped amplify selling in the first days of August. And while the jobs market has shown signs of slowing, a call for a recession has not been supported by much else. These coming economic data are capable of endorsing either side of the market.
Investors are also concerned with how the Fed will deal with the coming data. Projections for a 50-basis point rate cut in September spiked to 74% following the July Jobs Report. The current rate cut projections for a 25 versus 50-basis point cut are sitting around 50/50. The market has settled down from its recent tantrum but now sits on a line of uncertainty.
As a C or S-fund investor, you are essentially betting on the broader economy’s direction. Outside of these economic reports the market clings to, look outside your window. How is your local economy doing? Depending on where you live, this may be your inside view of what is to come. Are local businesses bustling, or are shops closing their doors? Are new construction projects breaking ground, or are they stalled indefinitely?
These local cues might give you your insight into broader economic trends. This may help you when deciding how much exposure to these currently volatile TSP funds you want in your allocation. If stock prices dip but you notice robust economic activity in your area—like long lines at every bakery and coffee shop—those lower prices might be a buying opportunity rather than a sign of trouble.
The non-premium TSP Talk community as a whole (706 investors) reduced their stock exposure and increased their G and F-fund exposure for the second straight week.
The S-fund had been growing in popularity among the community, but the average S-fund allocations has dropped from 28.58% to 26.54% in two weeks. The average C-fund exposure has dropped for the third straight week coming down from 32.81% on July 12[SUP]th[/SUP] to its current level of 29.14%. The G-fund holds its highest allocations average since late June.
Support the TSP Talk Community simply by starting your own free TSP Talk AutoTracker. It is a tool that can help you sharpen your own investing strategies while contributing to the success of others.
Good luck and thanks for reading! We will be back here next week with another TSP Talk Wrap Up. You can read our daily market commentary at TSP Talk - Market Commentary.
Thomas Crowley
(TommyIV)
www.tsptalk.com
Weekly Wrap-Ups Archive
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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.
