TommyIV's TSP Talk Blog

A week of mixed action produces gains for U.S. stock indices and new all time highs for the S&P 500. While the S&P 500 reached new all time highs there was still caution seen by investors. Stocks sold off Wednesday following the FOMC meeting that did little to reassure investors and gave an opportunity for some profit taking. The bull resilience pushed stock prices back near the highs for the week but much of the credit must be given to the heavy index weighted Apple performance. Apple has been rallying in anticipation for its upcoming split.

What are you buying when you getting into the C-fund? You are primarily buying big tech names. Large cap indices like the S&P 500 are top heavy and the top is tech. The broader market showed weakness particularly late in the week but your return on the C-fund was a result in Apple and the other tech giants' action. An index heavily weighted in a single sector leaves it vulnerable. Buying index funds is suppose to reduce risk by spreading your investments across the market. The C-fund is rising but not thanks to most stocks it represents. Divergence between equally weighted indices and capitalization weighted indices has been an indicator of an unhealthy brew. Celebrate your gains thus far but reassess your risk tolerance as the C-fund grows riskier. Even a 'healthy' rotation will take a toll on the C-fund price.

The TSP funds were mixed this week. The C-fund led with a 0.77% gain while the F-fund (bonds) outperformed the S-fund. The I-fund lagged with a loss of 1%.




Here are the weekly, monthly, and annual TSP fund returns for the week ending August 21st:




The SPY's (S&P 500 / C-fund) quickly added gains this week and produced new highs but took a fall following the FOMC meeting Wednesday. The index opened even lower Thursday but the rally in Apple lifted the entire index back to 0.77% gains for the week. The index is still in a rising trend and found support before testing the 20-day EMA.




The Dow Completion Index (S-fund) did not have the help of the large tech companies to regain the mid week losses. Still the index produced a slight gain 0.16% for the week. A rising trend marked the lows for the week and kept the index from both testing its 20-day EMA for support and filling an open gap from early August.




EFA (EAFE Index /I-fund) lagged the TSP funds for the week but remains within more than two month old trading channel. The index fell below its 20-day EMA Friday but found support from the trading channel and closed back above the moving average by close. The index took the only loss for the TSP funds for the week with a loss of 1.00%.




The BND (Bonds / F-fund) climbed its way back to its 20-day EMA to test for resistance from the support of the 50-day EMA. The 20 has held so far. Bond did fall Wednesday in reaction to the FOMC meeting but regained those losses by Friday. The F-fund gained 0.27% for the week but may have formed a bear flag in its charts.



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
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.