This was a very important week from an investment strategy perspective (please excuse length of text). On Friday, Microsoft closed at an all-time high, topping its previous high set on 27 December 1999. Yes, that’s right, almost 17 years ago. So I did a little bit more analysis and on 27 December 1999 the S&P 500 closed at 1457. On Friday, it closed at 2141. That equates to a 17 year total return of approximately 47 percent, which you might think is good. However, if you look at it from an investment perspective, that equates to only an annual return of approximately 2.3 percent, which most people would not find acceptable. The reason behind this is what I call the “Buy and Hold Calamity”, caused by those large Bear market losses in 2000 and 2008. Since the TSP allows two transactions a month, why not use that to our advantage and let the trend of the market drive small incremental changes to our allocation. That said, we’re recommending a slight decrease in equity fund (C/S/I) exposure (remember Microsoft is only one component of S&P 500) primarily based on the items mentioned over the past few weeks. If interested in additional investment strategy info, please check out weisertinvestments.com.
This was a very important week from an investment strategy perspective (please excuse length of text). On Friday, Microsoft closed at an all-time high, topping its previous high set on 27 December 1999. Yes, that’s right, almost 17 years ago. So I did a little bit more analysis and on 27 December 1999 the S&P 500 closed at 1457. On Friday, it closed at 2141. That equates to a 17 year total return of approximately 47 percent, which you might think is good. However, if you look at it from an investment perspective, that equates to only an annual return of approximately 2.3 percent, which most people would not find acceptable. The reason behind this is what I call the “Buy and Hold Calamity”, caused by those large Bear market losses in 2000 and 2008. Since the TSP allows two transactions a month, why not use that to our advantage and let the trend of the market drive small incremental changes to our allocation. That said, we’re recommending a slight decrease in equity fund (C/S/I) exposure (remember Microsoft is only one component of S&P 500) primarily based on the items mentioned over the past few weeks. If interested in additional investment strategy info, please check out weisertinvestments.com.