September 2019

August is traditionally a very slow month for the stock markets with lower volatility and lower volume. This August did not follow this pattern. I have to say we are in very unsettled waters, and as I have said in my previous posts, we will see a flat market, month to month, for the rest of the year. We just had violent swings this month and yet the C Fund was only down 1.59%. Obviously there was a rush to the F Fund (the bonds fund) as a safe haven to preserve capital, and it garnered a 2.6% return, but a simple move of the C Fund can outperform that return very easily. However, with all the uncertainty, my calculations are getting very close to putting me in the F Fund. I suspect the traders who are more sensitive to the daily stock market movements have already switched a portion of their portfolio to bonds, driving the bond yield inversion. Professionals who try to forecast recessions use this indicator as a recession gauge, but it is by no means an exact science. So I am investing in the C Fund at 100% for September. As I stated last month, I still feel the risk of a monthly loss outweighs the possible gain of 1% or so on a monthly basis. Added to this assessment now, I think the possible gain incurred in a resolution of the trade war and the upcoming Brexit (and possibly another Fed cut?) could provide additional stimulus to the market. I do not want to miss out on these gains. I'm investing for the long term and short-lived downward fluctuations are to be expected. Keep investing!