Stocks finally took a little dive off of the fiscal cliff on Friday morning, but they hung in there and saw just modest losses of less than 1%, and ended the week with some respectable gains.
Here are the TSP fund returns for the week of December 17 through December 21.
The early weakness on Friday took the S&P 500 down to the bottom of a rising parallel trading channel, but it found support there and remains in the uptrend.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I always keep an eye on seasonality, but it is only around Thanksgiving and Christmas / New Years that it has a direct impact on my allocation decision making. Being out of the market from the day before Christmas through the first few days of the New Year is like swimming against the current.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Sure, the market can be down during that time, but the odds over the last 60+ years favor positive action over the next 8 or 9 trading days - the best stretch of the year.
This year may be different because of the fiscal cliff and the capital gains increase in 2013, but I think there are investors who believe the risk of being out of the market when a deal is reached is greater than being in the market if no deal is made. That may have been why stocks were able to close well off of their lows on Friday.
The TSP will be closed on both Monday and Tuesday next week.
Per www.tsp.gov: "Some financial markets will be closed on Tuesday, December 25th in observance of the Christmas Day holiday. The Thrift Savings Plan will be closed on Monday, December 24 and Tuesday, December 25 in observance of the holiday. Transactions that would have been processed Tuesday night (December 25th) will be processed Wednesday night (December 26th), at Wednesday's closing share prices."
I think they forgot to mention that transactions that would have been processed Monday night (December 24th) will be also processed Wednesday night (December 26th), at Wednesday's closing share prices.
Good luck, and thanks for reading. Merry Christmas and Happy Holidays to all, and we will be back here on Wednesday with daily commentary, and next weekend with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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