TSP Market Summary: Week of June 11, 2020
Key Takeaways
- S&P 500's worst day since March ended the largest 50-day rally in history
- TSP equity funds (C/S/I) reached post-March highs before today's sharp decline
- Extreme volatility prompts recommendation to reduce equity exposure and take profits
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 |
|---|---|---|---|---|
| 40% | 0% | 35% | 25% | 0% |
As mentioned in last week’s update, the S&P 500 just had their largest 50 day rally in history. That rally continued through 8 June with the TSP equity funds (C/S/I) all hitting new post-March highs. Today however, reopening concerns reversed that recent rally with the S&P 500 losing 5.89% and having its worst sell off since March. So how does this loss compare with other S&P 500 “Top 10 down days” in 2020. Well, today was #4 so it\'s mid-pack. However, it should be noted that the “Top 3” were 12, 16 and 9 March when the S&P 500 lost 11.98, 9.51 and 7,60% respectively. In total 8 of the “Top 10” occurred between 19 February and 23 March, a period where it took only 22 trading days to drop 30 percent, the fastest market decline ever. With this extreme volatility and not wanting to see March revisited, TSP TIPS is recommending taking some money off the table as follows.