Good Evening, The market rose again today on the back of the tech sector. Although, the tech sector may come back to bite us tomorrow as Apple reported a decline in I Phone Sales during it’s earnings report after the bell. The stock is off over -1.00% in after hours trading so we will see what happens tomorrow. We also have the Fed reporting a 2:00 PM EDT tomorrow at the conclusion of their May meeting. They are widely expected to keep rates steady. Investors will be closely watching the statement for clues as to how many rate hikes will follow in 2017 and how fast they might come. I’m getting many (did I say many) questions about the I Fund. Specifically, why at you in it and why are you saying it will do better for the rest of the year. It’s been a while since the I Fund has outperformed the C and the S and many folks that are investing in TSP now either weren’t investing when it did or don’t remember it. Actually it was just after the dot com bubble burst in 2000 and a lot of them probably selectively removed it from their memory as  so many TSP investors were clawing out of the hole from a big losses. Unrelated, many of you who were with our group at that time will remember that we moved to the F Fund just prior to that bear market and actually made about 9% or so that year. Anyway, it’s been a while since the I Fund has been really relevant. Mostly due to currency issues and geo political events. One Gentleman in particular was invested at 50/S and 50/I which is a pretty good strategy. I will also add that his return is better than my return at this point. Although I would be amiss not to add that it is because I was 100/S and he had 50% in the I Fund. All I can say about that is good job and way to go. The only thing you could have done better in 2017 was to be 100% I Fund. Of course that could always change, but for now here was my answer to him for those of you who are contemplating the same thing. “Fundamental analysis would tell us that the I Fund would be the way to go. There are may factors that effect this. But the two most important factors at this time are the dollar, and the valuation of European stocks. The I Fund has been underperforming for some time largely due to the geo political issues and the value of the dollar. That has left foreign stocks and European stocks in particular at a discount as compared to domestic stocks which are in the midst of a multiyear bull market. Those discount prices are beginning to attract a lot of investors. In other words Europe is getting hot. Am I a fundamental investor??? No, I’m a technical analyst. I make my investment decisions based on the price action. Right now it’s pretty much of a wash when comparing the chart of the S Fund to that of the I Fund. So what your doing is not a bad strategy. However, I have two priorities when investing #1 always has and will be to protect my principle #2 is to achieve the highest performance that I can achieve while accomplishing #1. Which brings me to my point, When Fundamental Analysis and Technical Analysis agree on a Fund or Stock that’s probably where you want to be and right now that’s the I Fund. Can something change. Sure it can, the world is a virtual minefield, but those issues can bring the S Fund down as fast if not faster than the I Fund. Remember, the S Fund is made up of a large amount of small caps which makes it a bit more volatile than say the C Fund. Small caps are kind of like taking the elevator up but jumping out the window to go back down. So…you have two funds one domestic and one foreign. The charts are both good. The US market is getting toppy while foreign stocks are selling at a discount. Which one do you feel most comfortable with? If the answer is neither, then you are probably in the right place now at 50/S,50/I. If not, then you should go with the one you feel will do the best over the long run. Right now, for me that’s the I Fund. Recent performance bears that out. Year to date the S Fund is +6.24% and the I Fund is +10.47%. I don’t know how long you have been at this, but in either 2001 or 2002 (I’d have to check my records) I went 100% I and made +42%. It was one of  the best years that I ever had in TSP. When the I Fund heats up it can be quite lucrative and right now it is due. All that said, as with any investment you need to monitor it closely and respond to the price action that’s before you. In other words watch the charts. Never ever “set it and forget it”. One more thing before I go. I am not making any predictions. I am simply taking the current conditions and trying to position myself accordingly. It looks like things will be favorable for the rest of the year but nobody knows that for sure. That’s the reason we watch the charts. Bottom line, I’m in it because of what’s happening now.” There is no right way or wrong way, only what is working now and nothing last forever. Keep watching the charts!!!!!!!

The days trading left us with the following results: Our TSP allotment gained +0.52%. For comparison, the Dow added +0.17%, the Nasdaq +0.06% and the S&P 500 +0.12%. Praise God for another good day!

Wall Street edges up on heavy earnings day; Fed on tap

The days action left us with the following signals: C-Buy, S-Buy, I-Buy, F-Sell. We are currently invested at 100/I. Our allotment is now +6.08% on the year. Here are the latest posted results:

God bless, Scott

 

 ***Just a reminder that you can review the performance of our allocation at the Web Site TSPTALK.com in the autotracker section under the screen name KyFan1.

 

 

I produce and publish this blog as both a ministry and for the benefit of any Federal Government Employee. This is done to offer you some guidance as to how to approach your retirement more financially successful. When it is time for you to retire, I recommend you utilize the services of a Professional Money Manager, who works with a reputable investment firm. He understands the guidance you have already received and he can manage your savings assets utilizing a more advanced investment program into the future. 

 

If you would like to receive more information about this introduction, please feel free to contact me at  [email protected].