Good evening, TSPwire Tactical Investor!

Recession concerns swept through Wall Street, sending stock prices sharply lower while investors sought out the safety of Treasuries and gold. With Friday’s loss, the major stock indexes are down almost 5%. That’s the worst start since 1991 when the economy was in recession.

Recent economic indicators point more and more toward recession. This Thursday Federal Board President Ben Bernanke said that the central bank is prepared to continue lowering interest rates in order to help keep the economy on track. On one hand lower rates should spark economy growth, will improve liquidity on financial markets. At the same time we will have to face inflation and falling dollar.

Our current allocation has higher chances of benefiting from lower interest rates: 50% in I Fund, 25% in F Fund and 25% in C Fund.