TSP Market Summary: Week of June 23, 2018
Key Takeaways
- GE removed from Dow after worst 2-year performance, replaced by Walgreens drugstore chain
- Small cap (S Fund) and tech sectors hitting record highs, prompting shift from I Fund to S Fund
- Market rotation from industrial to healthcare reflects aging demographics trend
Recommended Allocation (Moderate Profile)
This is our historical recommendation from this date. For current recommendations, subscribe.
| G Fund | F Fund | C Fund | S Fund | I Fund |
|---|---|---|---|---|
| 0% | 0% | 40% | 60% | 0% |
This week we’d like to bring up change in America’s economic landscape. General Electric was one of the original companies in the Dow 30 when it was formed in 1896 and has been in it continuously since 1907. This week GE received its pink slip as its shares are down 28 percent this year and has been the worst Dow performer for the last two years. It should also be noted that GE cut its dividend by 50 percent last November. Taking its place in the Dow is the Walgreens drugstore chain, i.e. a rotational change from Industrial to Health Services, a reflection on an aging demographic. That said, the Dow broke a nine-day losing streak on Friday while the Small Cap Russell 2000 and technology led NASDAQ 100 each hit all-time highs. For TSP TIPs, we recommend a slight rotational change and allocate monies from the International fund to the Small Cap fund, while remaining 100 percent invested in equities. This will be our second and final allocation change for June.