F,C,S relationship

[david.alan.williams]

Hi,

I'm a newbie and just trying to learn as much as I can. I modified the TSPtalk.com spreadsheet to track the Dow, S&P, Nasdaq, Bonds, Oil, Gold, and Currency.

I've only been tracking since 1 January so my results are probably flawed.

1. For the most part, does the F Fund track opposite of the S&P 500 and opposite of the C Fund?

2. For the most part, does the C and S funds pretty much track together?

3. What the heck does the I fund track against? Overseas Markets???

Thanks!

 

[James48843]

Hi,

I'm a newbie and just trying to learn as much as I can. I modified the TSPtalk.com spreadsheet to track the Dow, S&P, Nasdaq, Bonds, Oil, Gold, and Currency.

I've only been tracking since 1 January so my results are probably flawed.

1. For the most part, does the F Fund track opposite of the S&P 500 and opposite of the C Fund?

It depends. F tracks bonds, and people tend to rush into bonds when stocks are falling. So yes, you could see days when stocks go up, and F goes down.

2. For the most part, does the C and S funds pretty much track together?

Both are stocks. C is the S&P 500, S is the next 4500 stocks. (Dow Jones U.S. Completion Total (^DWCPF)

Yes, stocks, as a large group, tend to ebb and flow together.

3. What the heck does the I fund track against? Overseas Markets???

.

Yes. the I fund generally tracks the iShares MSCI EAFE Index Fund (NYSE: EFA ) Although fund managers sometimes tweak that a bit and steal - skim- money off the top through "fair value" adjustments adn currency value changes.

 

[Boghie]

David,

Right now I am listening to Ric Edelman on my computer - he is a very good financial advisor. Listening to shows such as his and Ray Lucia's is a great place to start. I also highly - and repeatedly - suggest reading their books.

After that, how to answer your questions.

Most advisors recommend allocations which weight assets in all or some of the funds you have available. Check out the L Funds for examples - although most here would consider them flawed and too conservative.

1. Do the 'F Fund' and 'C Fund' track as opposites? Nope. Not guaranteed to do so. However, mixing bonds and S&P 500 equities should help reduce risk because when money flows out of stocks it generally flows into bonds - and the reverse is true. But, not guaranteed. Especially with the Fed and Treasury gaming the system. They can move together. Normally, they balance each other out a bit (although the equities funds will move far more than the bond fund). It is more that equities boom and bust and bonds just chug along and stabilize your returns.

Now, why is the 'F Fund' so lightly held here. It is, in my opinion, in a massive bubble. Folks ran away from equities and bought bonds. That, the Fed, and the Treasury all worked to dump the interest rates bonds had to offer to make folks buy them. When folks tell the bond sellers they ain't buying till interest rates go up than existing bonds will dump in value. As they are right now.

2. The C and S Funds are American equities funds. The big boys are in the C Fund, the rest of the United States market is in the S Fund. They tend to track together, but one will perform better at different times in a market cycle.

3. The I Fund is the big boy companies in Europe and Japan. No Brazil, no Russia, no India, no China. It is the S&P of foreign markets. It is NOT an emerging market fund.

 

[tsptalk]

3. What the heck does the I fund track against? Overseas Markets???

This data's a little old, but close enough...

 

[david.alan.williams]

Thanks to all who commented. Very good reading and info.

I decided to add to the tsptalk.com spreadsheet a few other entries.

At the bottom, 40% F, 20% C, 20% S, 20% I, is tracked and is performing at 1.63%

I added the following and here are the current numbers:

20% each G,F,C,S,I - 1.62%

25% in F,C,S,I - 2.0%

33% in C,S,I - 2.6%

50% in C,S - 2.99%


Are these worthy of adding to the TSP Auto Tracker since we have others like this added?

D