Good morning, my MB family, I'm back from my short trip and it feels like the world changed while I was gone. I said just before I left that the markets had at least another 20% to go down, but I didn't expect it to all happen in one week!
First of all, my thanks to Silverbird, Frixxxx and Nnuut for the good wishes, and thanks to Squale and Nasa for the shout-outs. It's amazing how much I miss everyone while I'm gone on these trips!
As for the other reason we're all here - the market talk - I think that we have the pieces in place now so that stabilization can occur, but I think that people and their hedge funds and their computers ALL have to quit panicking before we can actually have that stabilization. And I don't see that happening until we get down to the next strong support line, and that is 800 on the S&P. (If we break through that support line, start stocking up on food staples, and I'm not sure that I'm kidding with that statement.)
I'm in G and have been for some time, so I am meeting my goal of capital preservation. I firmly believe that we are going to see a big day upward soon, but I probably won't be in the markets for that first boost up. That's because, since I think there is still so much downside coming, I'm going to just plan on losing the first big tick up, because if I lost 10% then it would have to gain double that just to make up my loss.
What I'm saying here, for any new folks who might be reading, is that if I have a $200 TSP account and I lose 50%, then I have $100 left. But then I have to make a 100% gain on my $100 to get back to my original $200. So I'd rather lose the first big up day than keep riding down while trying to catch that up day.
That's my long-winded way of saying that I think TSP Executive Director Greg Long was wrong when he strongly encouraged people to stay out of G Fund now. Yes, the markets will come back, and yes, they will come back strongly when they do. But you have to preserve your capital in the interim. Telling all TSP participants that they shouldn't have jumped to G in the last while is like telling people to stay on the Hindenburg after the flames have already started.
Bottom line is that I think there is still some down-side in the markets and I'm not going to try to guess when the first up day is so I can be in the market when the up day happens. I will wait until a short-term moving average tells me that there has been a trend shift and then I will climb back aboard.
But then, don't follow me; I'm lost. :laugh:
Lady
