TSP funds: I’m Sure It’s Nothing

No sorry, I’m not posting a TSP chart this time.  I know, if you stare at the TSP charts your TSP fund price goes up faster. And if they went up last year that means they will go up forever.  Buy and hold, buy and hold, buy and hope…

No, today we look at an indicator.

An indicator of what? The credit cycle. You know, the driver of everything financial.

Oh the irony.

Do you remember CDOs and Mortgaged Backed Securities (MBS)?

Well since they worked out so well the last time and no one went to jail, why not push CLOs this time.  CLOs are collateralized loan obligations which are sliced and diced junk loans to corporations that are transformed into AAA securities by the same rating agencies that rated subprime mortgages AAA…

…And Goldman Sachs made a fortune betting the garbage they sold to their own clients would fail about 10 years ago.  But that was then and this is now and Goldman Sachs moved into the White House, so no worries.

CLO2 14 Dec 2018

Long term loans and key stroke selling do not go together

There are actually two ironies.

First AIG which was bailed out after the last financial crisis just completed their first CLO.

The second is former Federal Reserve Chairwoman’s declared in June 2017 that “we will see no more financial crisis in our lifetimes” to be followed up this week with “I fear another financial crisis“.

I’m sure its nothing.

Invest safe, invest smart.

If you want to know what I really think about your TSP fund’s future take a look at our TSP & Vanguard Smart Investor Dashboard to see what we offer in addition to email alerts when the stock market becomes uncertain.  



Categories: Perspectives, The Smart Bird, TSP Charts

%d bloggers like this: