When the headline of your newspaper is about the stock market, it usually means bad news. Our local paper, the Virginian Pilot, read “A Long Week”. No kidding. The Dow having its worst week since 2008. Interest Rate rise on Wednesday. The S&P 500 at its lowest level of the year at 2416, and just to top it off, a government shutdown Friday evening. And let’s not forget volatility, as measured by Bollinger Bands. Specifically, an upper and lower line are drawn on the price chart which captures 95% of price movement over the last 20 days. The distance between these lines creates a band which expands with strong price fluctuations and contracts during consolidations. With over one percent daily market moves becoming the norm, this band distance is at its highest level this year. As such, this band distance is offsetting the bearish price movement and given that, cash is king. For TSP TIPS, we’ll continue with our current allocation with no exposure in the equity funds (C/S/I). In closing, we wish everyone a Happy Holiday season!!
When the headline of your newspaper is about the stock market, it usually means bad news. Our local paper, the Virginian Pilot, read “A Long Week”. No kidding. The Dow having its worst week since 2008. Interest Rate rise on Wednesday. The S&P 500 at its lowest level of the year at 2416, and just to top it off, a government shutdown Friday evening. And let’s not forget volatility, as measured by Bollinger Bands. Specifically, an upper and lower line are drawn on the price chart which captures 95% of price movement over the last 20 days. The distance between these lines creates a band which expands with strong price fluctuations and contracts during consolidations. With over one percent daily market moves becoming the norm, this band distance is at its highest level this year. As such, this band distance is offsetting the bearish price movement and given that, cash is king. For TSP TIPS, we’ll continue with our current allocation with no exposure in the equity funds (C/S/I). In closing, we wish everyone a Happy Holiday season!!