09/27/2022

Good Morning, Are we at the bottom? I’ve been getting asked that question a lot this week. While I would guess that it’s probably OK to put your money back in the market now it would be just that, a guess. If you are using an investment strategy such as averaging in then I would say definitely that doing a little nibbling here would be acceptable. However, it’s just too early to tell if we are at the bottom yet or not. In our system we prefer to let the market turn back up and establish a new trend before we put our hat back in the ring. We are more than happy to give up those early gains to the more speculative investors. As I have often said we consider that payment on an insurance policy. So we now find ourselves back at the June lows. We anticipated that would be the case and we were correct. The current bout of selling has been encouraged by an unanticipated issue. The value of the British Pound. Usually, investors here don’t pay a lot of attention to the Pound or the Euro or any other of the leading currencies, but in the current inflationary environment they took notice. The pound as other currencies have been dropping against the dollar. This is in a large part due to the Fed increasing interest rates here in their battle with inflation and also most recently as a result of the new conservative British governments Regannomic like economic policy of tax cuts and economic incentives. You see this was a really crazy time for these type of policies to be implemented with inflation running so high and the British central bank working so hard to bring it down. It’s a lot like pouring gasoline on a fire if you will. It will definitely will make them more competitive over the long run but the timing is maybe not the best with regard to controlling inflation. The end result is that it actually weakened the pound while the at the same time the dollar was gaining in strength. So why does this effect the market? It increases the price of US goods making them less competitive as compared to foreign goods. It makes it much harder for US companies to do business and US corporate earnings are what make our domestic markets go round. There is one caveat about this issue which should be obvious to you all. Foreign business becomes more profitable and more profitable foreign business benefits the I Fund. We anticipated this earlier and tried to take advantage of it with an investment in the I Fund but we were just too early. If the current trend remains in tact the I Fund will eventually become the place to be. One last thing on this subject. US currency is normally compared to a basket full of foreign currencies such as the Euro and the Yen. These countries will all benefit from the strong dollar. You can keep a close eye on this by watching the UUP (Invesco DB US Dollar Bullish Fund). At least that’s the one I use. Of course you can always check each currency individually as well. However, checking the UUP tells me all I need to know about this relationship without having to do all that extra work. It is one of the indicators that I check on a daily basis.

The days trading is currently generating the following results. Our TSP allocation remains steady in the G Fund. For comparison, the Dow is now +0.94%, the Nasdaq +1,58%, and the S&P 500 +1.18%. It’s bouncing today but we’re going to have to see quit a bit of follow through before have an established uptrend.

Dow jumps more than 300 points to bounce back from lowest level since 2020

The recent action has left us with the following signals: C-Sell, S-Sell, I-Sell, F-Sell. We are currently invested at 100/G. Our allocation is now -27.59% for the year. Here are the latest posted results:

09/26/22Prior Prices
FundG FundF FundC FundS FundI Fund
Price17.055617.848955.816858.208628.6372
$ Change0.0047-0.2323-0.5833-0.9506-0.4692
% Change day+0.03%-1.28%-1.03%-1.61%-1.61%
% Change week+0.03%-1.28%-1.03%-1.61%-1.61%
% Change month+0.24%-4.58%-7.48%-10.41%-9.57%
% Change year+1.91%-14.54%-22.42%-30.24%-27.39%

More Prices & Returns

 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:

Our task continues to be to monitor our charts for the next trend change while blocking out all the external noise. Remember, for the most part News = Noise. That’s all for this week. Have a nice day 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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