The S&P 500 closed at 2874 Friday which marks back to back weekly gains for the first time since early February. From an economic perspective, the number of jobs lost during the coronavirus outbreak is reported at 22 million, but some relief came with the first round of stimulus checks being received. As the coronavirus curve is flattening, more hope and a market boost came Friday when Gilead Sciences reported a drug that has shown effectiveness in treating COVID-19. Just like we’re at the precipice with reopening the economy, we’re at that same precipice with reopening the equity funds (C/S/I) allocation of our TSP accounts. As mentioned above, this week we had back to back weekly gains in the S&P 500. As such, we took an initial position in the C fund right in the middle of those weeks. From a technical perspective, this was primarily due to the C fund’s “Performance Ranking (PR)” turning positive. The PR is a weighted average of a funds return over 1, 3, 6 and 12 month periods. Supporting this initial position was the fact that the C fund crossed above it’s 50 day Moving Average (MA) on Friday. While the F fund also has a positive PR, the S and I funds are still languishing in negative territory with their prices remaining below their 50 day MA’s. So the big question is “When do we next reopen that equity fund allocation?” The answer runs a wide gambit between thinking that “the market will ‘tank’ over the next few weeks/months” to “since the market is up, we should be 100% in equities”. That said, the answer is probably somewhere in between and thus that 40% C fund allocation based on the afore mentioned factors. We’ll continue to take an analytical approach and let fund price and PR determine that next step, and if we see fund PR’s turning positive next week, we will most likely reopen that equity allocation.
The S&P 500 closed at 2874 Friday which marks back to back weekly gains for the first time since early February. From an economic perspective, the number of jobs lost during the coronavirus outbreak is reported at 22 million, but some relief came with the first round of stimulus checks being received. As the coronavirus curve is flattening, more hope and a market boost came Friday when Gilead Sciences reported a drug that has shown effectiveness in treating COVID-19. Just like we’re at the precipice with reopening the economy, we’re at that same precipice with reopening the equity funds (C/S/I) allocation of our TSP accounts. As mentioned above, this week we had back to back weekly gains in the S&P 500. As such, we took an initial position in the C fund right in the middle of those weeks. From a technical perspective, this was primarily due to the C fund’s “Performance Ranking (PR)” turning positive. The PR is a weighted average of a funds return over 1, 3, 6 and 12 month periods. Supporting this initial position was the fact that the C fund crossed above it’s 50 day Moving Average (MA) on Friday. While the F fund also has a positive PR, the S and I funds are still languishing in negative territory with their prices remaining below their 50 day MA’s. So the big question is “When do we next reopen that equity fund allocation?” The answer runs a wide gambit between thinking that “the market will ‘tank’ over the next few weeks/months” to “since the market is up, we should be 100% in equities”. That said, the answer is probably somewhere in between and thus that 40% C fund allocation based on the afore mentioned factors. We’ll continue to take an analytical approach and let fund price and PR determine that next step, and if we see fund PR’s turning positive next week, we will most likely reopen that equity allocation.