financial planner Stephen Zelcer

TSP REPORT – NOVEMBER 2016

November 7, 2016 10:24 pm Published by Stephen Zelcer

Election day is tomorrow.(!)   Although the outcome of the election is uncertain, the economic wheels are already in-motion, and this month’s report and recommended portfolios reflect that.

TSP investors have asked me if any portfolio changes should be done ASAP or wait until after the election?

Good question!

I have been looking to see if any statistical metrics favor Trump or Hillary. There are too many metrics and none I feel comfortable relying upon. So, either way I answer this question I will be wrong. I will be guessing, which is the opposite of my whole strategy.

Facts:

  • GDP had notable growth for the 3rd Quarter 2016, rising to 2.9% in the preliminary estimate.  This is compared to the 1.4% growth in the 2nd quarter.  It has not risen above 3% nor fallen below 0.5% since the 3rd quarter of 2014.
  • The S&P 500 was down 2.29%.  After breaking through the 2100 point resistance point in July, it has seemed to hit another ceiling at 2170, while the 2100 level seems to now be the floor.
  • Unemployment had a modest improvement, decreasing by 0.1% to to 5.1%. This is the first improvement for the indicator in the last five months. It has remained in the 4.9%-5.1% range for all but one of the past 15 months.
  • PMI remained in expansionary territory for the 2nd month after falling into contraction in August. The indicator has remained in the 49-54 range during the past 10 months.

Assessment:

  • Unemployment & PMI indicators were fairly flat for the 7th consecutive month.
  • The largest moves occurred in GDP and the S&P, however their respective volatility pointed in opposite directions. Weakness in the $&P 500 is a warning signal as the calendar moves into 2017, but a fairly strong quarter for GDP shows more promise.
  • Putting it all together, the indicators  continue to forecast at best a little to no-growth economy.

Bottom Line:

Putting it all together, the indicators  continue to forecast at best a little to no-growth economy.

I have published my recommended TSP portfolios for November on my website TSPplanning.com.  My TSP portfolios carry the greatest return for the least amount of risk in this economic environment.  Only members can access my portfolios, and membership is FREE for the first month.  Get started HERE!

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