Good evening, TSPwire Tactical Investor!

After the volatile August major stock indexes ended up in positive territory. Economic data released Friday and a speech by Federal Reserve Chairman Ben Bernake fueled hopes that the central bank will cut its key interest rate target. Analysts say a lot could still go wrong in the early part of September. More then two weeks remain until the Feds next policy meeting, and September is traditionally the weakest month for the stock.

We strongly believe that until the next election political pressure will dominate over economical reasoning. Because of that domination Feds most likely will bailout financial markets. At the same time we do not have the same confidence in real estate sector. We do not expect recovery any time soon.

Tip: if you have a brokerage account consider hedging your investments by putting money in SRS. That ETF fund designed to go up 20% when real estate sector goes 10% down.

Our valuations did not change significantly since last week. I Fund still looks more attractive then C and S Funds. We will keep our distribution at 50% I Fund, 30% C Fund and 20% S Fund.

Rebalance your portfolios and be ready to roll!