More
Free Stock Market Advice
I
commented shortly after the 3 Oct bottom that Government employees in the
Government retirement system (TSP) might consider investing in the S-fund
(small cap fund) rather than the C-fund (the S&P 500) after a major
recession scare. Smaller cap funds do
better after recessions even imagined ones.
NTSM has a fair number of Government employee followers.
The
S-fund is actually an “all-the-rest” fund since it tracks the Wilshire
4500. That is pretty much all stocks
other than the S&P 500. The TR Price
Extended Equity Market Index tracks the same stocks as the S-fund.
The
following chart shows the TR Price Extended Equity Market Index (S-fund, blue)
vs. the S&P 500 (red) since the 3 October bottom.
The
Official TSP website agrees since it shows that as of Thursday the S-fund is
beating the C-fund by 5%. (TSP was closed Friday when I ran these numbers for
Veterans Day.)
In
troubled times, there is often a “flight-to-safety” i.e., bigger cap stocks, so
I’ll probably switch over to the C-fund at the end of November. A move on the last day of the month still
preserves 3-moves for December, since TSP rules do not allow more than
3-changes per month. A case can be made
that smaller cap stocks have less exposure to Europe and may continue to
outperform the S&P 500, so it’s kind
of a guess which way to go.
Now
the Bond Ghouls are after Italy as bond yields climb precipitously; suddenly
Greece is forgotten. Italy is a big
economy so it is very important to Europe.
We’ll watch the drama unfold.
The
NTSM system is HOLD today, so it’s no-change.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 100% long in
the long term portfolio (100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page).
I
am 80% long in the trading portfolio – up slightly from last week.
Just a reminder: 100% invested in stocks is way too much for most rational folks. Don’t do it unless you have a high tolerance for risk.
