TommyIV's TSP Talk Blog

Investors were once again coaxed into stocks with congress inching towards the long awaited stimulus. The prolonged stimulus negotiations in Washington may be hurting pockets of the economy in need, but in turn has been an advantage to stock investors. Naturally investors want their money ahead of the game. Moving more of your portfolio into stocks before the economy gets a monetary boost is solid and obvious plan. As congress claims its just around the corner from finishing a deal, more investors are taking note of this action plan while those who did the same the previous weeks are going to keep their stocks. I'm speaking generally but the net product has been a steady climb in a rising trading channel.

The promise of stimulus along with the Federal Reserve promising long term low rates lets investors disregard short term weakness to price in an economic recovery. A good portion of the economy has 'recovered' already but there is still a significant bout of troubled labor markets, restrictions on businesses, and added precautionary expenses. A sell the news reaction to a signed stimulus deal is on the minds of market participants but is not necessarily bound to happen. There seems to be enough holding this market together that is so focused on the long term that a short term pull back would be seen as a buying opportunity.

The FDA approval of the Covid-19 vaccine also holds hope for investors and attracts new buyers. The consumers piece of mind to go out into public will go well with their stimulus money.

The S-fund continues to outperform the TSP funds with more than 3% in gains for the week. The F-fund fell slightly this week in reaction to congress inching towards a stimulus deal but the chart holds its own strength by remaining in a key price range.




Here are the weekly, monthly, and annual TSP fund returns for the week ending December 18:




The SPY (S&P 500 / C-fund) actually ended Monday with a loss but received its gains in the mid-week days. Some gains were given back Friday but last minute stretch thanks to options and futures expirations lessened the toll of the rest of the trading day. The index traded within the trading channel its been in for more than a month and currently sits in the middle of the channel. The C-fund gained 1.29% for the week.




The Dow Completion Index (S-fund) also remained within its trading channel. The index has been trading at this rate for two months now. It feels like a change in character is due for the index. There are two week remaining for the year. The S-fund outperformed the TSP funds for the week with a gain of 3.7%.




EFA (EAFE Index / I-fund) had similar action to the C and S-fund. A gap produced Thursday was filled on Friday's pullback. The I-fund gained 2.0% for the week.




BND (Bonds / F-fund) chopped around for the week but ended the week on the lower side as an economic recovery drove investors out of bonds. The index remained above its 20-day EMA which is plus for index that had been slipping for months prior to November. The F-fund lagged the TSP funds with a loss of 0.08% for the week.




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.