On Thursday the S&P 500 booked its 68th record close of 2021, closing at 4725. Weve only had two record closes in December, but its been a roller coaster ride in an environment of omicron and rising inflation and interest rates. The ride started out on 1 December with the S&P 500 at 4513. By 10 December we had gained 4.4% and closed at 4712, the first record high of the month. Then we started the descent, dropping 3.1% and closing at 4568 on Monday, 20 December. And then, here we are only three days later, weve gained back 3.5% and stand at that second December record at 4725 as mentioned above. What a ride thus far this month, but whats around the corner on this roller coaster? According to the "Stock Trader's Almanac," the Santa Claus rally is the final five trading days of the current year and first two of the new year. During that period, the S&P 500 has been positive nearly 79% of the time since 1928 and has gained an average of about 1.7%. We already tacked on 0.62% on Thursday, so another 1.1% would bring us to 4777. Going back to our 11 December weekly update, we said, Splitting the difference, that would give us an S&P 500 close of 4773 at the end of 2021. Were in the ballpark and it sure would be nice to have another year end record high, just like we did on 31 December 2020. Next week is another holiday shortened week for the markets, but the big news will be Thursdays employment report. For TSP TIPS, weve been on that C fund roller coaster ride, but it is time to take that reallocation exit ramp. The S fund is currently 8% below its last record high on 8 November. The I fund is currently 3% below its last record high from way back on 7 September. Both have given us initial buy signals this past week, and looking back, performed well at the beginning of 2021. Since those three TSP equity funds usually move in tandem, we are hoping that the S and I funds will catch up with the C fund and are recommending the following allocation. Lastly, we wish everyone a very Merry Christmas!!
On Thursday the S&P 500 booked its 68th record close of 2021, closing at 4725. Weve only had two record closes in December, but its been a roller coaster ride in an environment of omicron and rising inflation and interest rates. The ride started out on 1 December with the S&P 500 at 4513. By 10 December we had gained 4.4% and closed at 4712, the first record high of the month. Then we started the descent, dropping 3.1% and closing at 4568 on Monday, 20 December. And then, here we are only three days later, weve gained back 3.5% and stand at that second December record at 4725 as mentioned above. What a ride thus far this month, but whats around the corner on this roller coaster? According to the "Stock Trader's Almanac," the Santa Claus rally is the final five trading days of the current year and first two of the new year. During that period, the S&P 500 has been positive nearly 79% of the time since 1928 and has gained an average of about 1.7%. We already tacked on 0.62% on Thursday, so another 1.1% would bring us to 4777. Going back to our 11 December weekly update, we said, Splitting the difference, that would give us an S&P 500 close of 4773 at the end of 2021. Were in the ballpark and it sure would be nice to have another year end record high, just like we did on 31 December 2020. Next week is another holiday shortened week for the markets, but the big news will be Thursdays employment report. For TSP TIPS, weve been on that C fund roller coaster ride, but it is time to take that reallocation exit ramp. The S fund is currently 8% below its last record high on 8 November. The I fund is currently 3% below its last record high from way back on 7 September. Both have given us initial buy signals this past week, and looking back, performed well at the beginning of 2021. Since those three TSP equity funds usually move in tandem, we are hoping that the S and I funds will catch up with the C fund and are recommending the following allocation. Lastly, we wish everyone a very Merry Christmas!!