Record bear market. Record bull market. What’s in it for you?

Since the bull market returned 11 years ago, experts in the stock market have warned that it wouldn’t last. While they had trouble pinning down the date of the next correction — 20% or more — all agreed it had to happen. The market bounced back in record time. After tanking in March of this year, the S&P 500 index (the C—fund for federal Thrift Savings Plan investors) was back in bull market territory.

The surprise wasn’t that it happened, but how quickly it happened. Many experts had predicted we were in a recession and probably heading for a massive depression in large part because of the impact of the pandemic on the world economy. But the market roared on despite unemployment and mounting coronavirus cases.

So what’s going on? And what, if anything should you as a long-term TSP investor be doing? Or perhaps more importantly, NOT doing. Is it time to time the market or stay put. And why is the market as of last week back in bull as opposed to bear territory?

A front page story in the Aug. 20 Washington Post that read TECH TITANS’ OUTSIDE GAINS MASK BROADER MARKET REALITY caught a lot of investors attention. It pointed out that the vast majority of the 500 giants that make up the S&P index aren’t doing very well — at all. “If it were not for just six of them, the benchmark would be down this year.” Those bright spots are Apple, Facebook, Amazon, Netflix, Microsoft and Googles’ parent Alphabet. So now what?

Advertisement

Should you buy, sell, hold or wind your watch (get your grandfather to translate)? What, if anything, is your next move? We turned to Abraham Grungold, a long-time fed, successful investor and financial coach for some words of wisdom. Here’s what he said:

The TSP Investor who has Patience Can Survive Anything

From 1987 to now, the Black Friday crisis, the dot-com crisis, the financial crisis of 2008-2009, and the COVID-19 pandemic all share a common factor. Each crisis instills fear into TSP investors; they see the sky begin to fall and their panic begin to rise. Many TSP investors quickly make an interfund transfer into the G Fund and believe they have saved the day. Unfortunately, they only caused harm to their accounts. My advice: find your patience.

During February and March, financial experts kept saying that the financial market will take years to recover. However, the US saw the shortest bear market in history from February to August. So then, what actually happened?

We are a resilient country. When restaurants closed, they expanded their takeout and delivery within their own business as well as to outside providers like UberEATS and DoorDash. Instacart, goPuff, and Amazon Fresh gained popularity as online supermarket shopping became more appealing. We adjusted to learning and working from home, and the supreme ZOOM has a new meaning in our lives. While the pandemic has changed our processes, this country is still as economically active as ever. We fight through adversity and meet the challenges.

I checked my TSP balance today, and it is higher than it was pre-COVID-19. For once, choosing to do nothing made me more money. This also happened to every other TSP investor who stood their ground and continued to buy cheap shares of the C and S Fund during the six months of the bear market. As I tell my clients, practicing patience may seem daunting in such a rapidly changing time in our lives. However, I truly believe that if you take a breath and choose to wait, the benefits will begin to roll in. So grab that calming glass of tea, turn off the news, and take some time to find your patience.

Financial success can easily be achieved; it only takes a little effort.

Any questions or comments please contact me at Grungold LinkedIn or my Facebook page at FERS Federal Employees.

Nearly Useless Factoid

By Alazar Moges

Hummingbirds are the only birds that can fly backwards and upside down. The design of a hummingbird’s wings differs from most other types of birds. Hummingbirds have a unique ball and socket joint at the shoulder that allows the bird to rotate its wings 180 degrees in all directions.

Source: Perot Museum