Thrift Savings Plan

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I think we need to consider reentering the markets, hopefully after a retreat of some kind. My cautious sell-the-rally move (9 Jan) was based on the fact that every correction greater than 15% in the last 50-years has retested the low. It seemed like a no-brainer; now it looks like I have no brains! There was another event that also had not happened in the last 50-years. Powell’s statement that the Fed “will be patient” regarding future rate hikes on January 4, 2019 was an unprecedented reversal of what he had said only a few weeks before. I mis-interpreted the importance of his statement. I now think that the stunning “V” rally since 24 December is due 100% to the Fed’s reversal. The market is now pricing in a greater likelihood of a rate cut for 2019 when just a month ago we were looking at 3-hikes.

This change presents new challenges. If there is indeed a slow-down large enough to bring a rate cut, it is not likely to be greeted warmly by the markets since it would suggest the economy is in trouble. If inflation picks up, a rate hike would also be a shock to markets. We live in interesting times as one of the longest expansions in US history is slowing. Will it enter recession? So far no, but economists are notoriously bad at predicting recessions – or even determining if we are already in one!

I expect a pullback reasonably soon. Perhaps I'll be able to increase stock holdings then.
From my blog at...
http://navigatethestockmarket.blogspot.com/