Interfund Transfer 6/13 for 6/14/06

[tsptalk]

The I and S funds have been pounded of late. I am going to take a position looking for an oversold bounce. I am making an interfund transfer this morning going to 20% G, 20% C, 30% S and 30% I fund.

[Mike]

We think too much alike. :p

My last 20% is going in at COB today as well, establishing a long-term allocation of 50 C / 25 S / 25 I. I may move some from C to I later - once the rate hikes end and the dollar is likely to be sent into a downward spiral as foreign countries' interest rates catch up with ours and / or their economic performance does likewise.

For some reason, I think most of the money has already been lost. I felt the same way last year when investing a sizable chunk in an SPX fund with my Roth at the lowpoint of the year for the market, so keep your fingers crossed.

[tsptalk]

It has been a long, rough road back. After being WAY behind the other funds' returns because of my defensiveness, my return just passed the return of the C fund for the year, is equal to that of the S fund, but is still trailing the I fund by about 1.8%. I believe at one point I was over 10% behind the S fund, and 15 or 16% behind the I fund.

The market can be humbling, particularly to braggarts, so I wanted to get this in writing before things changed. :)

This is nothing to be proud of (equaling the other funds) but it's a nice comeback. If only this drop came earlier this year as I had hoped. :rolleyes:

---------------------------------------------------------------------

Correction: Those stats above are not correct. I hadn't updated the share prices correctly on Wednesday. I'm still slightly behind each stock fund for the year.

[Mike]

Remember, your indicators are always a bit premature.

The question now is how long it'll take for the herd to dump its shares. You know darn well after all these drops, people will be taking every opportunity to sell and go defensive now that it's too late to do that. I would guess we're in for several weeks of choppy action before finally taking off.

[tsptalk]

The indicators are so oversold I think we'll get a little more pop for our money than people think. Have you heard anybody that doesn't believe the market is going to sell off on every rally, experts included? Hmmm, makes you think a wall of worry is being built.

But it could be just enough (maybe 3 to 4%) to suck in more "victims" before a later test of the lows later in the summer.

Just a guess because of the prevailing pessimism out there. I'm anxious the see AAII surveys tonight.