All three TSP stock funds were down for the week, but each differed in magnitude. The lucky stock investors had their hand in the large cap C-fund that was protected by the large gains of energy stocks included in the S&P 500. Building sanctions and disdain towards Russia's oil supply has lifted oil prices leaving room for more profits for existing oil and energy companies. The C-fund ended the week with a loss of 1.23% and more than half of those losses came Friday. Small caps lagged large caps without the big oil company stocks leaving the S-fund with more than double the losses (-3.24%) of the C-fund. But the greatest loss this week came from the less recognized I-fund that fell 7.39% in the last five days. The I-fund's losses reflect the economic pain felt in Europe over the Russia invasion of Ukraine as well as the rise in value of the dollar over competing currencies. TSP investors are not typically too involved in the I-fund and on our own TSP AutoTracker here on TSP Talk, members have been evacuating their holdings of the I-fund and the current average allocation of the I-fund is less than 3%.
Price action was all over the place this week and it is reasonable to think we'll see more of the same moving forward. Uncertainty is increasing again now that the war in Europe carries on. Uncertainty prior to Russia's invasion drove stocks down and it wasn't until the invasion actually took place to see some relief in stock prices. Now the question is how will this war end, and at what economic damage will be inflicted to end Russia's tyranny? As said above, Russia's oil supply is the greatest economic threat worldwide and that threat is the price of oil. Higher oil prices drive inflation higher which is already a big concern in the U.S. economy.
The Federal Reserve has made promises to combat inflation by slowing the economy by means of raising borrowing costs. However, with the new added uncertainty of oil prices rising, which the central bank cannot manipulate, we risk entering a stage of stagflation where economic activity slows while prices continue to rise. Stocks sold off Friday after a better-than-expected jobs report for January. Positive economic data allows the Federal Reserve to justify their rate hikes. Will they be more accommodative now that the Ukraine and Russia war adds uncertainty out of their hands. The next FOMC meeting is March 15 - 16 and as of now the committee is expected to raise rates by a quarter percent.
We are in a bear market. The easy gains we grew use to in 2021 and no longer on the table. But stocks have slipped drastically in value over the last couple months. The S-fund has already given back its accumulated gains of 2021. This gives a few options with your TSP. You can enter into stocks now to lock in these low prices in hopes stocks will eventually reign, all while avoiding stock day to day action for the sake of your sanity. You can also avoid stocks all together and jump in when some real momentum in stocks builds again. Or you can time the ups and downs of this volatile market action. Bear markets bring days of large gains. Your choice of course depends on your appetite for risk, how close you are to your financial goals, and how close you are to retirement.
Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.
Here are the weekly, monthly, and annual TSP fund returns for the week ending March 4:
The SPY (S&P 500 / C-fund) struggled to maintain gains this week but had established a rising trading channel. That short trading channel was broken Friday when SPY slipped below the support line after the reaction to the positive jobs report. The ETF spent some time above its 200-day EMA late this week but is now back below. The C-fund fell 1.23% for the week.
The Dow Completion Index (S-fund) is not trading around its 200-day EMA anytime soon. The index did outperform the large caps the previous week but could not hold onto the momentum. Instead, the S-fund lost more than double what the C-fund lost this week with similar action but with a greater magnitude of losses. The S-fund lost more than 2% on Friday alone.
The Dow Completion Index (S-fund) has been trading in a price range not seen since December of 2020. All of 2021's gains have been erased and it happened quickly. I it reasonable to think this index can fall much further? The S-fund has been a popular investment for TSP members, but many are waiting for this index to officially establish a bottom.
EFA (EAFE Index / I-fund) rolled into deeper losses this week but it was an impressive loss this week. The I-fund fell 7.39% this week. Prior to the Ukraine and Russia conflict, this index had been thriving as an option for stock investing against the troubles U.S. stocks. Does this big loss mean there is opportunity to catch a relief rally, or will the war continue to drag this ETF down further? There was an open gap left open from Fridays open.
BND (Bonds / F-fund) came off its highs this week but still managed to produce 0.96% in gains for the F-fund. Bond market action is growing volatile with a combination of the war in Europe and the Federal Reserve's plans to raise interest rates. BND is back above its 20-day EMA but back off of its intra-day highs for the week once they approached the 50-day EMA.
Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
Thomas A Crowley
wwww.tsptalk.com
Last Look Report
Facebook | Twitter
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.
Price action was all over the place this week and it is reasonable to think we'll see more of the same moving forward. Uncertainty is increasing again now that the war in Europe carries on. Uncertainty prior to Russia's invasion drove stocks down and it wasn't until the invasion actually took place to see some relief in stock prices. Now the question is how will this war end, and at what economic damage will be inflicted to end Russia's tyranny? As said above, Russia's oil supply is the greatest economic threat worldwide and that threat is the price of oil. Higher oil prices drive inflation higher which is already a big concern in the U.S. economy.
The Federal Reserve has made promises to combat inflation by slowing the economy by means of raising borrowing costs. However, with the new added uncertainty of oil prices rising, which the central bank cannot manipulate, we risk entering a stage of stagflation where economic activity slows while prices continue to rise. Stocks sold off Friday after a better-than-expected jobs report for January. Positive economic data allows the Federal Reserve to justify their rate hikes. Will they be more accommodative now that the Ukraine and Russia war adds uncertainty out of their hands. The next FOMC meeting is March 15 - 16 and as of now the committee is expected to raise rates by a quarter percent.
We are in a bear market. The easy gains we grew use to in 2021 and no longer on the table. But stocks have slipped drastically in value over the last couple months. The S-fund has already given back its accumulated gains of 2021. This gives a few options with your TSP. You can enter into stocks now to lock in these low prices in hopes stocks will eventually reign, all while avoiding stock day to day action for the sake of your sanity. You can also avoid stocks all together and jump in when some real momentum in stocks builds again. Or you can time the ups and downs of this volatile market action. Bear markets bring days of large gains. Your choice of course depends on your appetite for risk, how close you are to your financial goals, and how close you are to retirement.
Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.
Here are the weekly, monthly, and annual TSP fund returns for the week ending March 4:
The SPY (S&P 500 / C-fund) struggled to maintain gains this week but had established a rising trading channel. That short trading channel was broken Friday when SPY slipped below the support line after the reaction to the positive jobs report. The ETF spent some time above its 200-day EMA late this week but is now back below. The C-fund fell 1.23% for the week.
The Dow Completion Index (S-fund) is not trading around its 200-day EMA anytime soon. The index did outperform the large caps the previous week but could not hold onto the momentum. Instead, the S-fund lost more than double what the C-fund lost this week with similar action but with a greater magnitude of losses. The S-fund lost more than 2% on Friday alone.
The Dow Completion Index (S-fund) has been trading in a price range not seen since December of 2020. All of 2021's gains have been erased and it happened quickly. I it reasonable to think this index can fall much further? The S-fund has been a popular investment for TSP members, but many are waiting for this index to officially establish a bottom.
EFA (EAFE Index / I-fund) rolled into deeper losses this week but it was an impressive loss this week. The I-fund fell 7.39% this week. Prior to the Ukraine and Russia conflict, this index had been thriving as an option for stock investing against the troubles U.S. stocks. Does this big loss mean there is opportunity to catch a relief rally, or will the war continue to drag this ETF down further? There was an open gap left open from Fridays open.
BND (Bonds / F-fund) came off its highs this week but still managed to produce 0.96% in gains for the F-fund. Bond market action is growing volatile with a combination of the war in Europe and the Federal Reserve's plans to raise interest rates. BND is back above its 20-day EMA but back off of its intra-day highs for the week once they approached the 50-day EMA.
Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
Thomas A Crowley
wwww.tsptalk.com
Last Look Report
Facebook | Twitter
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.
