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All good questions.
when you our "out of the market" when do you determine the G fund versus the F fund? I mean, the F fund has a greater return historically but right now Tom, you advocate the G fund? What is your determining factor.
We are kind of split here on this question. My thought is that interest rates are more likely to go up than down in the next several months. When rates go up, bonds and the F fund usually go down. When I'm "out" I like myassets to be safe rather than risk a day like today. During the recession, when rates were coming down, you would have been better off in the F fund than G. As I said, others herehave a different view.
By the way, the F fund is down. What determines up or down on this fund if it is "fixed".
Mainly, when bonds yields go up, bond prices, and the F fund, go down.
I know that funds like Vanguard Index 500 represent the C fund pretty much as far as a good comparision, but what are the equivalent funds for the rest of the 4 funds (I know G probably doesn't have an equivalent) In other words, I need an equivalent fund that tracts the EAFE, Wilshire 4500, Bond fund. This may be an ignorant statment, please help.
I would recommend you check out my rudimentary explanation of each of the funds on this page -->
http://www.tsptalk.com/funds.html. If you still have questions, let us know.
Also, please explain what "covering a short" means and how that can artificially raise a price.
Whensomeonethinks the market is going to go down (a bear) he can actually sell stock that he does not own (called selling short). He thinks the price is too high so he sells. Eventually, he has to buy it back and he hopes he will do so at a lower price. He's trying to buy low and sell high, but in reverse.
Soif the bear has a bunch of short positions, and the market goes up, he is losing money. For him to get out of his position, he must buy the stock (called short covering). This buying looks likepositive action on the market indices, but it's just a guy getting out of a short position. Ifthere area lot of people in the same situation, you can have rallies that are quite exaggerated because of the short covering and regular buyers.
Make sense?
Tom
