New Allocation: 75% S Fund, 25% G Fund
Growing your TSP is a marathon, not a sprint. Rule #1: Do Not Lose Money! Rule #2: Be Invested in the Stock Funds when the Overall Market is Trending Up. It’s all about risk management and this Alert is a great example.
We’ve been talking about the bullish triangle consolidation forming on the S fund for the past several weeks. Today the S fund popped thru upside resistance to new highs. This is the perfect time to buy the S fund! Almost 3 months of resistance was finally cleared, with the ascending bottom putting the odds of continued higher prices in our favor. In addition, the technical indicators have turned up from consistent lower highs since June. This is a great chart!
With all that said, what are the downside risks? Ideally, the resistance line at 1460 will not be violated. Worst case scenario is the lower triangle line is violated at 1440. That would completely invalidate the pattern and force a sell in the S fund. 1440 is a 2.5% downside risk with an upside potential of almost 10%. It’s a no brainer in terms of risk/reward.
That’s enough for now. The Sunday Update this weekend will be comprehensive and explain why the S fund and not the C and I funds…
Post questions to comments or hit me on FB.
Have a great week