Want an exciting, different chock-full-of-surprises summer vacation? If so, take the family on a cross-country trip. By car. To add spice to the adventure and keep the kids off their phones and on their toes, cover the front windshield. You know the one you normally look out while driving. Then navigate exclusively using only the rear view mirror. Plus the comments you are likely to hear from other motorists. The idea is to figure out how to get where you are going based on where you’ve been. And those comments. Continue until you run into or over a bluff in Nebraska. Or wind up in a river that appeared suddenly and without any hind-sight warning.

Now apply that to your Thrift Savings Plan. Investing for the future in a super-vehicle like the TSP can be exciting. Which is a mistake according to financial expert Alan Roth. His motto is “Dare To Be Dull.” He says if you are jubilant or depressed by financial news, you are probably doing the wrong thing. He spelled it out in his book, “How A Second Grader Beat Wall Street.”

The second grader is his son, who had a great track record when money meant little too him, but who had less success as he became more interested in investing and started paying more attention to financial news and predictions.

Most TSP investors know the stock market is long overdue for a major correction of 20-30%. The question is when will that happen, how long will it last, and what, if anything, you should be doing about it?

Do you head for the ‘safety’ of the treasury securities G fund? That’s what tens of thousands did during the 08-09 Great Recession. Some continued to buy shares in the then sagging C, S and I (stock indexed) funds. Others stayed exclusively in the G fund. Some never returned to stocks even after the decade-long run. Arthur Stein, a Washington area financial planner with lots of federal clients, says the low-yield G fund isn’t all that safe, especially for people under the Federal Employees Retirement System program, whose annuities don’t keep up with inflation. Over time, he says, inflation can erode their buying power. For example, Civil Service Retirement System retirees got a 2.8% cost of living adjustment in January. But under their diet-COLA formula, FERS retirees got only 2%. While that’s 2% more than most private sector retirees — under fixed for life pensions — it could quickly eat into their buying power.

Past performance is all most non-psychic investors have to go on. But which yardstick do you use? Monthly performance? Annual returns? Year-to-date numbers? Which?

Take the month of May, please! All of the stock funds were down last month. Only the G and F bonds were ahead. And not by very much. For stocks, the year-to-date numbers were all better than the last-12-months. Now what?

On Wednesday June 5, the Wilshire Factoid reported that the U.S. stock market, reflected in Wilshire 5000 Total Market index, recorded a one day (paper) gain of $200 billion. Check out these long-term numbers and past performances to see what they tell you, if anything. Where we’ve been is not always necessarily where we are going.

June 5, 2019 FACTOIDS:

The Wilshire 5000 Total Market Index (W5000) closed today at 29,101.16 up 196.23 points or 0.68%.

This represents a paper gain for the day of approximately $200 billion. 

The Wilshire 5000 rose for the second day in a row and for the third time in the past five trading days.

For the month, the Wilshire 5000 index is up 2.58% or approximately $775 billion.

For the quarter, the Wilshire 5000 index is down -0.57% or approximately $175 billion.

For the year, the Wilshire 5000 index is up 13.02% or approximately $3.5 trillion.

Since the recent, December 24, 2018 market low, the Wilshire 5000 index is up 20.49% or approximately $5.2 trillion.

Since November 6, 2018, the close on the day of the 2018 Election, the Wilshire 5000 has gained 2.23% or approximately $675 billion.

Since the September 20, 2018 market high, the Wilshire 5000 index is down -4.48% or approximately $1.5 trillion.

Since January 20, 2017, the close on the day of the Trump Inauguration, the Wilshire 5000 has gained 22.56% or approximately $5.9 trillion.

Since November 8, 2016, the close on the day of the 2016 Election, the Wilshire 5000 has gained 31.29% or approximately $8.0 trillion.

Since December 15, 2015, the close before the Federal Reserve raised interest rates for the first time since June 29, 2006, the Wilshire 5000 index is up 37.92% or approximately $9.2 trillion.

Since September 12, 2012, the close before Bernanke revealed QE3, the Wilshire 5000 index is up 93.51% or approximately $16.2 trillion.

Since August 26, 2010, the close before Bernanke revealed QE2, the Wilshire 5000 index is up 165.21% or approximately $20.8 trillion.

The Wilshire 5000 is up 324.31% or $26.7 trillion from the Financial Crisis low of March 9, 2009. 

Since the old, October 9, 2007 market high, the Wilshire 5000 index is up 84.11% or approximately $16.6 trillion.

Nearly Useless Factoid

By Alazar Moges

When M&M’s were initially released, they were sold exclusively to the U.S. armed forces. The candy is heat-resistant and travels well, that is how the idea came about. The son of candy magnate Frank C. Mars, Forrest Mars Sr., observed British soldiers eating pill sized candies called Smarties that had a chocolate center and was impressed by how they held up in the heat. Mars returned to America with his idea to create his own such candy and started production of the beloved treat we all know today.

Source: History.com

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