It was a volatile trading week with the S&P 500 recording its first negative month since October. Earnings came in with 82% of companies reporting beating expectations, but this was overshadowed by the retail investor “GameStop pump and dump” frenzy which had market trading volumes at 23.7 billion shares. As I always like to go back to last instances, let’s return to that last bearish instance in October and see how things evolved. On 28 October, the S&P 500 lost 3.53% and closed at 3271, below its 50-day Moving Average (MA). After setting a new record high on Monday, the S&P 500 closed at 3714 on Friday, also closing below its 50 day moving average for the first time since October. That’s a gain of 13.5% in just three months. For TSP TIPS, the three month gain has been 15.6%, bumped up by the fact that we have been overweighted in the S fund. In retrospect, the market does have recurring “sell-offs”, but there is usually a bullish bounce back. Yes, we have taken some money off the table this week driven by technical analysis (price below 50 day MA). Also, since no one can predict the future, we’ll maintain our analytical “glass half full“ allocation investing approach while pushing emotions aside.
It was a volatile trading week with the S&P 500 recording its first negative month since October. Earnings came in with 82% of companies reporting beating expectations, but this was overshadowed by the retail investor “GameStop pump and dump” frenzy which had market trading volumes at 23.7 billion shares. As I always like to go back to last instances, let’s return to that last bearish instance in October and see how things evolved. On 28 October, the S&P 500 lost 3.53% and closed at 3271, below its 50-day Moving Average (MA). After setting a new record high on Monday, the S&P 500 closed at 3714 on Friday, also closing below its 50 day moving average for the first time since October. That’s a gain of 13.5% in just three months. For TSP TIPS, the three month gain has been 15.6%, bumped up by the fact that we have been overweighted in the S fund. In retrospect, the market does have recurring “sell-offs”, but there is usually a bullish bounce back. Yes, we have taken some money off the table this week driven by technical analysis (price below 50 day MA). Also, since no one can predict the future, we’ll maintain our analytical “glass half full“ allocation investing approach while pushing emotions aside.