.
I've received a couple of questions asking if we should have moved to cash on Monday, and given the market conditions, if we should move today or tomorrow.
Simple answer is that as of the close of Tuesday's night's data, in which the markets were all down a significant amount, NONE of my timers triggered for us to go to cash. This means "sit pat".
It's important that we remain fairly mechanical here. When the markets reverse, our indicators will change, and we will react accordingly. Anticipating what you think the market is going to do is the same as predicting what you think the market will do, and in the end, your crystal ball is as good as mine.
My GGT/TSP system is an intermediate-term system. It has seen a drawdown as large as 9% -- this means that if you had $100,000, under my system, you realized a $9,000 loss, leaving you with $91,000. Putting this in perspective, the buy-and-hold approach had you down at least 37% in the same time frame, depending upon your weightings, so your $100,000 was worth $63,000. It's a lot harder to get up from a 37% loss than to make up a 9% loss.
Everybody relax. The TSP accounts are not day-trading, or even week-trading accounts. The goal is long-term growth, with the desire to not experience large draw downs in equity. Some reversal is normal, and some loss at market consolidation points is expected. When the markets turn I'll notify everybody (I *am* checking this daily because we are at a critical juncture), and if they reverse and move down, you'll know within hours after I do. Conversely, if we get another gasp of fresh air, you'll automatically move upward on the news. Either way this is a win-win.
Regards,
pgd
No comments:
Post a Comment