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Weekly TSP Wrap-up
from
TSP Talk
Last week was a volatile week for the stock market as 4 of the 5 trading
days ended with the Dow Jones being up or down 90 or more points; two of
those were up, and two were down. We had a few important economic
data reports released, plus earnings reports from many bellwether
companies, which added to the large swings.
When all was said and done, the TSP stock funds ended the week with
mixed results.
The C and S funds were down 0.72% and 1.7% respectively, while the
I-fund, with the help of a weaker U.S. dollar, managed a 0.47% gain.
The F-fund (bonds) was basically flat.
For the month of October, all of the
stocks funds remain in positive territory, and the F-fund is flat.
The high volatility could be indicating that we are near a short-term
top as the bulls and bears jockey for position. Each time we saw
one of them move the market in one direction, the other side took
advantage and brought it right back. By the end of the week the
bears had a small victory as the the S&P 500 did end in negative
territory.
So, the bears won this battle but the bulls are still winning the war as
the TSP stock funds remain up between 22% to 31% for 2009. That is
quite impressive, but of course after the disaster in 2008, the two year
returns for the stock funds are losses of between -20% to -24%. We
still have some catching up to do.
The chart below shows the average monthly returns of the S&P 500 (which
is what our C-fund tracks) for the 56-year period between 1950 and 2005.
As we head into the last week of October, the market can take a look
forward to the top three performing months historically; November
through January. Actually, we are about to start a 6-month period
which includes the top 5 performing months historically. February
is the only black eye between November and April.
Chart provided courtesy of www.sentimentrader.com
Of course this is just an average
and anything can happen during any given month. For instance,
September is the worst performing month historically, yet this year the
stock funds all saw very strong gains that month.
I would not trade based solely on this information as I actually believe
we are due for a little pullback, but any and all information is worth
considering when you have to make an allocation decision.
Good luck, and
thanks for reading. We will be back here next week with another
TSP
Wrap Up.
Tom Crowley
www.tsptalk.com
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