Yesterday the markets dropped off significantly with a global tariff sell-off and it looks like it will continue today based on this mornings futures action. Major market indices had their worst day since 2020, and if we look back that also coincided with the COVID pandemic, the fastest drop in market history.
For the TSP equity funds, here are yesterdays results: C fund down 4.83%, S fund down 6.99% and the I fund down 1.85%. Since we do not have an allocation in the C and S funds, lets move on to the I fund. If we have another day like yesterday, that would trigger an additional reduction in the I fund allocation based on its Composite Score.
At the beginning of the week we recommended a reduction in the I fund allocation to approximately 50% in all three models. This counted as our third March investment mix, so we still have both our April investment mixes available. If we use our first one today in a bearish move, we would still have a second available if the markets somehow rallied during the rest of April. Trends do not change that rapidly and this bearish trend that started in mid-February looks like it has some legs on it. Again, this is based on historical scenarios and driven by analytics, not emotion.
As mentioned in last weekends technical perspective, a key support level for the S&P 500 is the 13 March closing low of 5,521. Were only about 1% above that now, so a close below will also be a new Year To Date low. The next concern would be a further selloff to 4,915, which is 20% off the 19 February record closing high, i.e. bear market territory. For next week 2 April is the effective date of tariffs, so expect more market volatility.
The S&P 500 broke through that 5,521 level yesterday. Could it drop down to 4,915 in bear market territory? Going back to the fastest drop since COVID, we recommend a new investment mix in all three models to 100% in the G fund as we try to stay ahead of the storm.
Yesterday the markets dropped off significantly with a global tariff sell-off and it looks like it will continue today based on this mornings futures action. Major market indices had their worst day since 2020, and if we look back that also coincided with the COVID pandemic, the fastest drop in market history.
For the TSP equity funds, here are yesterdays results: C fund down 4.83%, S fund down 6.99% and the I fund down 1.85%. Since we do not have an allocation in the C and S funds, lets move on to the I fund. If we have another day like yesterday, that would trigger an additional reduction in the I fund allocation based on its Composite Score.
At the beginning of the week we recommended a reduction in the I fund allocation to approximately 50% in all three models. This counted as our third March investment mix, so we still have both our April investment mixes available. If we use our first one today in a bearish move, we would still have a second available if the markets somehow rallied during the rest of April. Trends do not change that rapidly and this bearish trend that started in mid-February looks like it has some legs on it. Again, this is based on historical scenarios and driven by analytics, not emotion.
As mentioned in last weekends technical perspective, a key support level for the S&P 500 is the 13 March closing low of 5,521. Were only about 1% above that now, so a close below will also be a new Year To Date low. The next concern would be a further selloff to 4,915, which is 20% off the 19 February record closing high, i.e. bear market territory. For next week 2 April is the effective date of tariffs, so expect more market volatility.
The S&P 500 broke through that 5,521 level yesterday. Could it drop down to 4,915 in bear market territory? Going back to the fastest drop since COVID, we recommend a new investment mix in all three models to 100% in the G fund as we try to stay ahead of the storm.