TSP Distribution: S-fund 50%, C-fund 50%
We had a very nice recovery this week and except for the Small Cap, we got all the gains back from last weeks losses, plus a percentage point or two. Don’t get me wrong, the Small Cap did very well this week but it was just enough to get all the losses back with no real gains on top. Personally my account went up 2.44% this week which is a yearly high for me. This week we had bull flag breakouts on the S&P and International which held. The Small Cap recaptured it’s bull flag but has yet to breakout and hold. I do believe that it is a very weird situation where we have a current active buy status on the C,S,I, and F all at the same time. F does not normally follow along with the other three, but obviously it does happen. Secondly, in recent years, the International was not always following along with the other indexes.
I made a little change in the rate of return picture that I normally use. I made my spreadsheet calculate the annualized rate of return based on the return paid year to date. I wish there was a way to guarantee that they followed through until the end of the year and payout what we see in that bottom line. That would be very nice. Could it happen? Sure, it’s happened a few times since I have been in the TSP, so let’s keep our fingers crossed. But remember our goal, 7% or more with no double digit losses annually.
Charts? Is there anything to see or talk about at this moment in time? Not really. There is only one thing that the S&P 500 and International have that is common and they are a bit overbought. That means nothing to me, but it is just good information to know. The Small Cap is doing catch up as I mentioned above, so that index is not overbought. Bonds still looking good and I actually had to move the CBL line up to chase price.
I know a few of you have told me that you have jumped back into stocks and some have made adjustments to reflect what is moving and what is lagging. Those are all brave moves consider a few points. One we are making new high’s and that scares a lot of people when it comes to buying now. Most conservative investors would like a major pullback and then they feel they have an opportunity to buy at lower prices. It’s hard to argue against that thought process but I will tell you that is not a very good system. I tried it and lost much more than I won. Here is another point, the last entry signal that I got on the S&P 500 was 11/28/12 and the Small Cap 11/27/12. That is a very long run without a sell. The last thing is something I pointed last week and that is the volatility of May. As far as May goes, I say we just watch the charts and see if it tells us to bail before anything major happens. As far as buying when something is making new highs, let me show a stock and ask you what you would do.
So would you buy it? After a 20% move uphill, would you buy it? Well if you would not get back into the C, S, or I because they are up 12% for 2013, then how could you justify buying the stock above? It’s hard I know, but uptrends normally continue to uptrend for a long time and they are hard to break. I will agree that when they break they break hard and if you need proof, just find a 8 month chart on Apple Stock. Do you want to see what happens after point 2? There it is below and if you want the answer, click it. otherwise stay in the dark and learn nothing. Greed and Fear will never help you in the stock market, but learning to read and putting the odds in your favor will increase your odds at being right.
Have a great weekend,
No comments:
Post a Comment