TSP Talk – Weekly Wrap Up

Stocks finally took a little dive off of the fiscal cliff on Friday morning, but they hung in there and saw just modest losses of less than 1%, and ended the week with some respectable gains.

Here are the TSP fund returns for the week of December 17 through December 21.

The early weakness on Friday took the S&P 500 down to the bottom of a rising parallel trading channel, but it found support there and remains in the uptrend.

Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

I always keep an eye on seasonality, but it is only around Thanksgiving and Christmas / New Years that it has a direct impact on my allocation decision making. Being out of the market from the day before Christmas through the first few days of the New Year is like swimming against the current.

Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk

Sure, the market can be down during that time, but the odds over the last 60+ years favor positive action over the next 8 or 9 trading days – the best stretch of the year.

This year may be different because of the fiscal cliff and the capital gains increase in 2013, but I think there are investors who believe the risk of being out of the market when a deal is reached is greater than being in the market if no deal is made. That may have been why stocks were able to close well off of their lows on Friday.

Good luck, and thanks for reading. The TSP will be closed on both Monday and Tuesday next week so Merry Christmas and Happy Holiday to all, and we will be back here next week with another TSP Wrap Up.

Tom Crowley
Weekly Wrap-Ups Archive
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The legal stuff: This information is for educational purposes only! This is not advice or are commendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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