TSP REPORT FOR MAY 2017

May 15, 2017 2:29 pm Published by Stephen Zelcer

Alrighty! The May TSP Planning Report is out!

Once again, the environment is favoring stock investing. C fund and S funds are looking good. Even the I fund shows signs of normalcy. So, Take a look at some of the more aggressive portfolios. You may be surprised to see a downside exposure that is “stomach-able.”

My lower yielding portfolios are G fund heavy because when stocks do well, you only need a small dose of stocks to lift your overall portfolio performance.

Facts:

• The S&P 500 was up 1.25% in the month of April.   The 3-month performance was 4.77%
• PMI levels were at 54.8%, which is well over the mid-range of 50.
• Unemployment was slightly improved, down to 4.4% which is 0.1% lower than it was last month.
• However, the initial GDP estimate for the 1st quarter 2017 was a paltry 0.7%, a notable drop.

Assessment:

• Again, PMI’s numbers display strong expansion.  Of the 18 manufacturing industries, 16 reported growth, which is a nice indication that U.S. manufacturing is alive and well.
• Unemployment is going down and has been doing so consistently.  This means more people have jobs, which in turn boosts economic revenue.
• The S&P 500 bounced back from last month’s unexplainable loss.  The 3-month performance has been very solid.
• GDP numbers are weak.  Historically, the first estimate of the year is the consistently the lowest.  If GDP doesn’t increase by the 2nd quarter of 2017, then we may need to adjust the portfolios.   I will keep an eye out for that.

Bottom Line:

Overall, the US economy is looking healthy.  I know there are nay-sayers, but the data suggests otherwise.  Once again, we are in an early-mid stage of the economic cycle.  Stocks funds bode best in such a case.  In such an environment, even a small dose of stocks can boost overall portfolio performance.  Remember, DON’T JUST LOOK AT RATE OF RETURN.  Always view the target return of each portfolio in the context of its ranges of fluctuation.  You may see the higher portfolios are not as risky as they looked last month.  The TSP portfolios below carry the greatest return for the least amount of risk in this economic environment.

I am here to help you reach your TSP goals. I monitor the data, apply it to the TSP, and make my recommendations based on the facts and the science. All this is done so you can keep on track to reach your TSP goals.

You can access the report with my recommended portfolios on the website, www.TSPplanning.com.

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