April 2023 TSP Planning Report
- The 1st estimate of Q1 (2023) GDP has come out, showing a 1.1% growth in GDP. This is on the heels of 2.6% GDP growth in Q4 2022.
- The G Fund rate for April 2023 decreased back to 3.625%. It was 4.125% last month.
- The Fed Funds interest rate remained at 4.83%.
- This month’s unemployment rate decreased from 3.6% to 3.5%.
- PMI (Purchasing Managers Index) finally expanded for the first time in 5 months. This month’s reading came in at 50.4, compared to last month’s 47.7. (Any reading below a score of 50 means contraction).
- The S&P 500 (C Fund) increased 3.67% in March. YTD, S&P500 is up 9.03%
Sluggish GDP –
GDP grew 1.1% . This was lower than expected. However, it’s not too surprising and the market didn’t respond negatively. Why?
PMI expanding –
One reason the market didn’t respond negatively is because there was a bright future painted ahead by forecasters.
The PMI (Purchasing Managers Index) had shown manufacturing and services contracting for the last 4 months. Clearly there was less demand for products, materials, services.
PMI is usually a “leading” indicator, meaning its a forecast of things to come, not of past. A contracting PMI metric forecasts that there will be less sales taking place in the coming months.
However, this month we saw a glimmer of light. PMI expanded, showing an uptick in growth. Even though companies posted declined sales for the past quarter, there is reason to assume growth for this coming quarter. This sent markets up.
I cannot change my portfolios based on just 1 month’s data. I am watching to see if there’s a continuing trend.
See this month’s recommended portfolios. DON’T JUST LOOK AT RATE OF RETURN. Always view the target return of each portfolio in context of its ranges of fluctuation.
Anyone who has more than 5 years before drawing income from their TSP should consider taking a more aggressive posture going forward and use my aggressive portfolios below. If you are within 5 years of retirement, you should email me to get a more customized recommendation.
If you have any questions, feel free to contact me.
Email me here – firstname.lastname@example.org