06/15/2021

Good Evening, The market has been on pause this week as it awaits the conclusion of the June Fed meeting. As usual, the meeting will conclude with an announcement and news conference at 2:00PM tomorrow. We always take the Fed seriously and have always told our group not to fight the Fed. I know it seems like I have said it a lot in recent months, but brace yourselves because I’m going to say it again. This Fed meeting is the most important one the I can remember here to date. OK Scott, Why this meeting, why again this time???? I can feel your skepticism! He doesn’t have anything new to write about. I beg to differ this is different. The ante has been raised with regard to this Fed meeting. Just yesterday  Billionaire hedge fund manager Paul Tudor Jones told CNBC that this Fed meeting could be the most important in Chairman Jerome Powell’s career. Tudor Jones also warned that Powell could spark a big sell-off in risk assets if he doesn’t do a good job of signaling a taper in the Fed’s monthly asset buying. By the way that’s the same Paul Tudor that called the crash in October of 1987. If you don’t already know about that one or it was just flat before your time then Google it. Every good investor should know about that day. Anyway, the thing that makes this Fed meeting so important is that we are sitting on a powder keg with regard to inflation. It’s not a matter of if inflation will increase to the point that the Fed has to act (controlling inflation is one of their mandates) but when. As the economy improves inflation will increase and the Fed will be forced to increase interest rates to tighten up the money supply. You see interest rates were already at record lows prior to the pandemic. The Fed had decreased the rates to near 0 after the financial crisis in 2009. By the matter of fact the Fed started to increase the rates just prior to the pandemic but was forced to reverse the increase shortly after the pandemic shut the economy down. We also all are well acquainted with the second part of the stimulus that the Fed put in place to rescue us from the great financial crisis and left in place after the pandemic came along which is the monthly purchase of treasury bonds to support the bond market. This is where it gets a little complicated. You almost have to be an economist to get down to the nuts and bolts of it all. To make is as simple as possible the price of bonds and more importantly their yield which moves in the opposite direction of the price effects interest rates. The higher the yield the more expensive money is. That is to say the higher interest rates go. There are also other issues with the bond market but that is the main one. Economists and investors watch what is called the yield curve which is the difference between short term and long term bonds. when that curve becomes inverted it is very bad for the economy and the market. Inversion is when the short yield becomes more expensive than the long term yield. I  certainly hope I didn’t get that backwards because I am not an economist. The important thing to me is whether the yield curve becomes inverted. At any rate as I mentioned in another blog, all this Fed stimulus makes  money cheap and when money is cheap a lot of it flows into the market. Of course it is the opposite when money becomes more expensive (interest rates go up). That  is the reason that the market is so addicted to the cheap money supply. The fact that this stimulus  which is unprecedented to start with has gone on so long makes it all the harder to bring it to an end. It is a lot like someone who has been hooked on drugs suffering withdrawal sickness. Take my word for it. It will not be a good thing when all this  gets well underway. The G Fund will be the most important fund in Thrift when that day comes!! So whatever you do, keep your eyes on inflation, interest rates and tapering of the bond program. That is why tomorrows Fed meeting is the most important one to date!!!!!

 

The days trading left us with the following results: Our TSP allotment ended the day in the red by -0.52%. For comparison, the Dow fell -0.27%, the Nasdaq -0.71%, and the S&P 500 -0.20%.

 

 

The days action left us with the following signals: C-Buy, S-Buy, I-Buy, F-Hold. We are currently invested at 100/S. Our allocation is now +14.40% on the year not including the days results. Here are the latest posted results:

 

06/14/21 Prior Prices
Fund G Fund F Fund C Fund S Fund I Fund
Price 16.6047 20.8112 63.7731 84.8888 39.6529
$ Change 0.0021 -0.0440 0.1312 -0.1586 0.1052
% Change day +0.01% -0.21% +0.21% -0.19% +0.27%
% Change week +0.01% -0.21% +0.21% -0.19% +0.27%
% Change month +0.06% +0.41% +1.29% +2.51% +1.33%
% Change year +0.58% -1.82% +14.06% +14.40% +12.05%
Fund L INC L 2025 L 2030 L 2035 L 2040
Price 23.0095 11.8724 41.9032 12.5873 47.6439
$ Change 0.0085 0.0088 0.0394 0.0127 0.0519
% Change day +0.04% +0.07% +0.09% +0.10% +0.11%
% Change week +0.04% +0.07% +0.09% +0.10% +0.11%
% Change month +0.39% +0.73% +0.93% +1.02% +1.10%
% Change year +3.28% +6.39% +8.06% +8.80% +9.56%
Fund L 2045 L 2050 L 2055 L 2060 L 2065
Price 13.0562 28.6108 14.0685 14.0684 14.0683
$ Change 0.0148 0.0347 0.0231 0.0231 0.0230
% Change day +0.11% +0.12% +0.16% +0.16% +0.16%
% Change week +0.11% +0.12% +0.16% +0.16% +0.16%
% Change month +1.18% +1.25% +1.48% +1.48% +1.48%
% Change year +10.20% +10.86% +13.35% +13.34% +13.34%

 

 

 

 

 Now lets take a look at the charts. All signals are annotated with green circles. If you click on the charts they will become larger. If you want to learn more about technical analysis check out the website StockCharts.com.
C Fund:
S Fund:
I Fund:
F Fund:
I really wish there were nothing to write about….. That’s all for tonight. Have a nice evening and may God continue to bless your trades!
God bless, Scott Sunglasses
 
 ***Just a reminder that you can review the performance of our allocation at the Web Site TSPTALK.com in the autotracker section under the screen name KyFan1.
 
 
I produce and publish this blog as both a ministry and for the benefit of any Federal Government Employee. This is done to offer you some guidance as to how to approach your retirement more financially successful. When it is time for you to retire, I recommend you utilize the services of a Professional Money Manager, who works with a reputable investment firm. He understands the guidance you have already received and he can manage your savings assets utilizing a more advanced investment program into the future. 
 
If you would like to receive more information about this introduction, please feel free to contact me at  KyFan1@aol.com. 

 

 

 

 

 

 

 




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