Good afternoon, TSPwire Tactical Investor!
Fear continued to grip the stock market to end the worst week in more than four months, while investors sent gold prices to near records. Traders feared for the worst Friday afternoon. Some had to settle expiring options bets, a process that often adds volatility, while others were on guard against political news that might break over the weekend while markets are closed. Financial stocks continued to decline amid talk of bank nationalizations, although the Obama administration tried to quash the speculation.
Decliners outpaced advancers by about three to one among stocks that are listed on the New York Stock Exchange. Trading volume was heavy with more than eight billion shares changing hands.
The Standard & Poor 500 stock index (C Fund) fell 1.1% after coming within three points of its November 20th low during the day. C Fund was off 6.9% for the week.
The Russell index closed 8.3% down for the week. Market sentiment still seemed to get its cue from the financial sector as chatter about potential nationalization of big-name firms loomed.
Treasury prices (F Fund) also rose Friday, sending yields lower.Markets ended sharply lower in Asia and Europe (I Fund) on Friday, with financials among the worst performers as investors fretted about contracting economies.
Oil futures slipped 1.4% to $38.94 a barrel, though the price rose 3.8% for the week.
The US Dollar fell sharply Friday as investors booked profits on gains earlier in the week. The dollar decline was more technical than fundamental. The reverse began when euro dipped to $1.265, a key technical level at which many traders and hedge funds had orders to buy the 16-nation common currency. With many traders positioned in favor of the dollar at the beginning of the session, the selling quickly drove the euro to one-week high near $1.29 from the three-month low just above $1.25.
"the only way to get hurt on roller coaster is to jump off!" (c) Dave Ramsey. We choose to keep our fund allocation the same and lower our cost basis.For the next week we will keep our allocations at the same level 25% S Fund, 25% C Fund and 50% I Fund.