With the stock market dipping, with the TSP’s stock-index funds down four months in row, what are feds and retirees to do? Buy, sell, sit tight? Is there light at the end of the tunnel, or is this, as one well-known financial writer says, the new normal?

Which financial guru on television gives the best stock tips? Which columnist is right more often than wrong? Who can successfully read the market, tipping you on the best time to buy, sell or hold? When you bail out of sagging stock funds in your TSP plan for the “safety” of the bonds (the F-fund) , or the Treasury-securities G-fund, how do you know when to return to the stock market? Who knows how long oil with be on sale?

The answer is:

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Uh, can we get back to you in a couple of months? Got some last-minute numbers to crunch and some charts and graphs to update? Also, things will be clearer when the Russia, Iran, China, North Korea situations calm down, the Antarctic ice pack melt rate is more clearly known. Plus some other loose ends. Also, when Elvis feels it is time to come out of hiding with a comeback in Las Vegas. Oh, and who gets the Democratic and Republican nominations, who, if any, makes a third party run, etc. Knowing who the next POTUS will be would also be a major break.

Or, is this the new normal? Have we hit a speed bump that’s brought us back to reality?

Here’s what Allan Roth, columnist for AARP, said in his Feb. 17 column. Roth points out that the U.S. stock market has been up every year from 2009 to 2015, although last year’s growth was tepid. He said the Wilshire 5000 Total Market Index returned “a whopping 166 percent, or 15 percent annually” during the seven-year recovery period. So when people ask him when the stock market will become more normal, he said, “It just did … I explain that it was the past six-years that were abnormal, not the last six weeks.” To read his full column, click here.

Roth, who has also written for The Wall Street Journal, says if you can’t handle a drop of 50 percent in your stock portfolio, you probably shouldn’t be in the market.  “In fact,” he said, “one should rebalance when that happens and that’s like being kicked in the gut three times and asking for three more. Rebalancing is more easily said than done. I found the clients that told me they would easily be able to rebalance after a 50 percent plunge were the ones who I spent the most time talking off a cliff. Clients that thought about it and imagined how painful that drop would be did a much better job of rebalancing.”

Nearly Useless Factoid

By Michael O’Connell

Director Mel Brooks’ birth name was Melvin James Kaminsky.

Source: IMDB

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