Edited by author 08-21-2009 08:32 PM
I threw up the previous message real quick to beat the actual TSP release - I figured it would be out momentarily. Just went back & checked, the last time the C fund was over $12 was October 6, when it was $12.12.

I heard a lot of chatter on the news today about Bernanke saying we were starting to pull out of the recession, and there was news that housing sales were up nicely. I suspect that Mr. Market may have already factored some of this news into his outlook, which could be why it's as high as it is today.

Risk-Reward Revisited

A while back, I tried to do some rough calculations on a possible risk/reward scenario for the market going forward. Given the passage of time, we've seen some new figures, some new news, and the "experts" have come out with some new predictions.

First, remember that on Mar 9th THIS YEAR, the C fund stood at $7.86. Tonight's C fund figure isn't out yet, but I'm pretty sure my $12.07 guess is in the ballpark. That's a $4.21 gain in just over 5 months, which is HUGE - 54%!!!!!!!!!

Right now, the highest guesses I'm seeing for the S&P are around 1,200. That would be about 17% higher than the market closed today. It's harder to find any agreement on a where a possible pullback would take the market, but the 940 area looks pretty sticky (just as it was pretty hard to break going up, it might be hard to break if the market went back down). I also see an area right around 900, and mid-800's. Everyone (including the TSPtalk guy) has been waiting for a market pullback, so they can jump aboard the train at lower prices, and the market has NOT been accomodating them. It's possible that we'll get that larger pullback just when everyone is least expecting it (when all the news seems to be getting better). Anyhow, let's take the 850 level as an extreme pullback case. That would be 17% lower than where we are now. Hmm, the market COULD go up 17%, and it MIGHT go down 17%. What to do? Long-term, my feeling is that the market could go up quite a bit more, just because it had such a HUGE drop. Short term (next few months), I'm thinking we may see that long-awaited pullback. So it all boils down to timing, which it usually does. IF you put 100% of your TSP money in the C fund on the lowest day, and are now up by 54%, I'd say pull back while the dust settles. Of course, there are as many scenarios out there as there are TSP holders. I doubt that many were all in for the big rise, and are now eyeballing that HUGE gain thinking they'd like a piece of that. Trouble is, going forward, I doubt we'll see another 54% gain in the next few months.


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I meant to add that I did a funds transfer today, pulling 25% more out of the stock funds, putting it into the G. Remember, I'm super cautious with my TSP account, and usually get out too early. I'm close to retirement, and don't like "gambling" with such a large amount of money. Anyhow, my move should guarantee we get a nice move up in the next week or so, LOL.