From our 3/02/09 daily market commentary:
Stocks opened in dire straights on Friday, but quickly found their footing turning a 150-point decline into a small gain by the afternoon, but by the close sellers jumped back in and took the Dow down 119 points.
After a dismal 2008, the TSP stock funds ended down 8% to 12% in January, and now another 10% in February. Taking a look at all of the red in the TSP fund returns above, it is becoming more obvious that TSP participants need another option to invest in. Perhaps a gold or precious metals fund, or even a fund that shorts the market (bet against the market), in an attempt to make some money during bear markets. How long can we go on, not only not making money, but losing money if you are in any fund other than the G-fund?
The S&P 500 has now clearly broken the 741 low made in November of last year. I will give it another day or two before I say that the low is not in, and that this is not a bottom but the start of another leg down. But with the Dow and Dow Transportation Index both having penetrated the lows for more than three days, I think the odds are stacking up against the S&P 500.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That said, things are so bad, that I would expect some kind of rally this week or next. The question is, how low can it go first, and who will be brave enough to step up and buy in front of Friday's jobs report? Perhaps the jobs report will trigger a capitulation-like sell off that will give us another short-term buying opportunity?
Speaking of capitulation, the Cycle of Market Emotions seemed like it was nearing a bottom last fall, but since it did not, I suspect that we still have a capitulation to go through. We are seeing signs of people completely giving up, and you get people like me saying things like, "we need more TSP fund options because we can't make money in C, S, and I funds." That is actually a good sign. Too much bearishness.
There will likely be more damage, but each day we are getting closer to a bottom. It could take weeks, months or years, but it's getting closer. Right now I am not as concerned about finding THE bottom, as much a finding A bottom. The only way to make money in this bear market, aside from the pennies we can get in the G-fund and the sometimes iffy gains of the F-fund, is to try to catch a rally when we get them. It is a risky proposition, but no risk, no reward.
View the entire article here.
Stocks opened in dire straights on Friday, but quickly found their footing turning a 150-point decline into a small gain by the afternoon, but by the close sellers jumped back in and took the Dow down 119 points.
After a dismal 2008, the TSP stock funds ended down 8% to 12% in January, and now another 10% in February. Taking a look at all of the red in the TSP fund returns above, it is becoming more obvious that TSP participants need another option to invest in. Perhaps a gold or precious metals fund, or even a fund that shorts the market (bet against the market), in an attempt to make some money during bear markets. How long can we go on, not only not making money, but losing money if you are in any fund other than the G-fund?
The S&P 500 has now clearly broken the 741 low made in November of last year. I will give it another day or two before I say that the low is not in, and that this is not a bottom but the start of another leg down. But with the Dow and Dow Transportation Index both having penetrated the lows for more than three days, I think the odds are stacking up against the S&P 500.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That said, things are so bad, that I would expect some kind of rally this week or next. The question is, how low can it go first, and who will be brave enough to step up and buy in front of Friday's jobs report? Perhaps the jobs report will trigger a capitulation-like sell off that will give us another short-term buying opportunity?
Speaking of capitulation, the Cycle of Market Emotions seemed like it was nearing a bottom last fall, but since it did not, I suspect that we still have a capitulation to go through. We are seeing signs of people completely giving up, and you get people like me saying things like, "we need more TSP fund options because we can't make money in C, S, and I funds." That is actually a good sign. Too much bearishness.
There will likely be more damage, but each day we are getting closer to a bottom. It could take weeks, months or years, but it's getting closer. Right now I am not as concerned about finding THE bottom, as much a finding A bottom. The only way to make money in this bear market, aside from the pennies we can get in the G-fund and the sometimes iffy gains of the F-fund, is to try to catch a rally when we get them. It is a risky proposition, but no risk, no reward.
View the entire article here.
