financial planner Stephen Zelcer

TSP Report December

financial advice for federal employees

Facts:

  • Unemployment remained at 3.7%.
  • 3rd Quarter GDP came in at 3.4%, according to the 2nd estimate.
  • PMI, again, posted another solid month of expansion, with the index reading 59.3%.
  • The S&P 500 (C Fund) rebounded and yielded 2.04%

Assessment:

  • Unemployment has held strong, holding on to its lowest levels since 1969.
  • 3.4% quarterly GDP is (relatively speaking) amazing.
  • PMI continues it’s impressive streak, performing well above-average (50% is considered average) for the past 24 months.
  • The S&P 500 is currently negative 10% for 2018 YTD!!!

Bottom Line:

I honestly don’t know what to say except that the fundamentals are still solid.  My attitude towards rising interest rates has not changed from last month.  See last month’s report.  Also, I know this volatility is scary for pre-retirees.  You will need to make sure you have the TIME in your portfolio to ride out the volatility.  If you need to derive income over 2019, you need to carve out that money from your portfolio and  put it into the G fund.  The remainder should be invested in the C fund.  Certainly all new TSP contributions should buy into the discounted S&P 500.

Even though the fundamentals economic indicators have not changed, I cannot ignore the investor sentiment.  As such I’ve revised my portfolios.  As you’ll see, you’ll need more stock exposure to pursue middle-of-the-road returns.

Check out the 3 page report below.   DON’T JUST LOOK AT RATE OF RETURN.  Always view the target return of each portfolio in context of its ranges of fluctuation.

To Download this months portfolios please click here

Dec.-2018-report

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