"Fear" has been a theme with the markets selling off lately due to interest rate hike fears, China trade fears, and U.S. economy fears. This week then ended with global economic growth fears, starting with Asian markets and continuing with Europe until the U.S. markets felt the fear with the S&P 500 closing Friday at 2599.95. From a technical perspective, I’d also like to mention that the S&P 500 had a “Death Cross” a week ago on 7 December. This is when its 50 day Moving Average (MA) crosses below its 200 day MA and is considered a bearish signal. This also completes its most recent bullish cycle, which started 25 April 2015, with a gain of 26.1%. For this upcoming week we have the Fed meeting, and it looks as if an interest rate hike is imminent and we’ll probably get greater clarity regarding the future direction of interest rates. For TSP TIPS, fear isn\'t a “direct” factor when it comes to our TSP allocation strategy since our analysis is based primarily on price. However, these market fears have “directly affected market volatility” causing almost daily market swings of over one percent. Our defensive position in the G fund has allowed us to "side-step" recent market events, but what has been surprising is the F fund’s Performance Ranking and price improvement over the past few weeks. As such, we are recommending allocating 15 percent to the F fund with the remainder in G.
"Fear" has been a theme with the markets selling off lately due to interest rate hike fears, China trade fears, and U.S. economy fears. This week then ended with global economic growth fears, starting with Asian markets and continuing with Europe until the U.S. markets felt the fear with the S&P 500 closing Friday at 2599.95. From a technical perspective, I’d also like to mention that the S&P 500 had a “Death Cross” a week ago on 7 December. This is when its 50 day Moving Average (MA) crosses below its 200 day MA and is considered a bearish signal. This also completes its most recent bullish cycle, which started 25 April 2015, with a gain of 26.1%. For this upcoming week we have the Fed meeting, and it looks as if an interest rate hike is imminent and we’ll probably get greater clarity regarding the future direction of interest rates. For TSP TIPS, fear isn\'t a “direct” factor when it comes to our TSP allocation strategy since our analysis is based primarily on price. However, these market fears have “directly affected market volatility” causing almost daily market swings of over one percent. Our defensive position in the G fund has allowed us to "side-step" recent market events, but what has been surprising is the F fund’s Performance Ranking and price improvement over the past few weeks. As such, we are recommending allocating 15 percent to the F fund with the remainder in G.