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Update 06/02/09
After
over one year at a 40% cash (G-fund) allocation during the bear
market, I am making a move in this hypothetical account to raise even
more cash after the huge bear market rally that began in March of this
year. Today's (June 2, 09)
Daily Market
Commentary will explain the why part.
The new
allocation in this hypothetical inactive account is:
60% G-fund
20% C-fund
10% S- fund
10% I-fund
Through June 1, this fictitious account is up 5.3% in 2009, after dropping 22.5% in 2008.
Effective COB 6/02/09.
Final 2008 Return
|
TSP Talk |
G Fund |
F Fund |
C Fund |
S Fund |
I Fund |
20% Each |
|
Less Active |
+3.75% |
+5.45% |
-36.99% |
-38.32% |
-42.43% |
-23.04% |
|
-22.50% |
|
|
|
|
|
|
|
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L2040 |
L2030 |
L2020 |
L2010 |
L-Inc |
|
|
|
-31.53% |
-27.50% |
-22.77% |
-10.53% |
-5.09% |
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Update 05/12/08
I took advantage of the recent strength and put the 40% back into
the G fund in this buy and hold / hypothetical TSP account. The new
allocation in this hypothetical inactive account is:
40% G-fund
30% C-fund
15% S- fund
15% I-fund
Effective COB 5/12/08 or the morning of 5/13/08.
Update 01/15/08
I went ahead and put the 40% I had in the G and the F funds today
(20% in each) and moved them into the stocks funds. The new
allocation is:
50% C-fund
25% S- fund
25% I-fund
Effective COB 1/15 or the morning of 1/16/08.
01/01/08
I am going to start
2008 off in conservative mode in this hypothetical inactive account. I will look for the air to clear before getting fully invested
again. The charts are not looking particularly well and I would
feel better keeping some powder dry while we see how things play out.
That said, I like buying when things look their worst, and we could see
that in the next couple of weeks or months.
For this account,
I will start out 2008 with an allocation of:
20% G
20% F
30% C
15% S
15% I
The long-term account ended 2007 with a +6.64% return. It was not
earth shattering as it fell somewhere in between the returns of the TSP
funds:
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2007
|
Totals |
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G Fund: |
+4.87% |
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F Fund:
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+7.09% |
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C Fund:
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+5.54% |
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S Fund:
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+5.49% |
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I
Fund: |
+11.43% |
The F fund was the surprise of the
bunch, beating both the C fund and the S stock funds. Like
2006, the I-fund was again helped by a weakening dollar in 2007.
The credit crunch
is still with us keeping investors on their toes. As I
mentioned, sometimes it is better to buy when no one else wants to.
Sentiment is low and we could be very close to a better buying
opportunity, but the market does tend to go down longer / further
than you might think would be reasonable. The same happens
during long market rallies.
Things are looking bad and we may be hitting the fear and
desperation area on the cycle of emotions, but I don't think we have
seen any panic or capitulation yet. That may take time to
develop.
2007 did experience the long overdue 10% correction I had been
looking for. The question is, will it get worse? Will we
actually experience a bear market (20% decline) before it's all
over? I tend to think that will not happen. There are
too many good things happening in spite of the credit situation and
the possible recession. Interest rates are still very low and
stock valuations are not a problem at all when compared to other
investment options such as bond yields.
So, their is no magic formula for 2008. The market is working out
some financial and economic issues, but a good buying opportunity
will come sooner or later. That's when I will move back to a
100% stock allocation in this account. By then we should have
seen a little more panic in the air.
Good luck!
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