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I was thinking, how could someone benefit from knowing the G-fund penny?
I came up with this G-fund / C-fund strategy. If you calculated every day the G-fund would pay the penny (correctly) and made a one day switch to the G-fund each time to get the penny from a C-fund position, what would your return be? (Keep 100% C-fund except switch to 100% G for penny days.)
Below is a table for the data I have with me
Not too shabby. You end up beating the S&P 500.Code:Year C-fund C/G Penny Strategy 2004 10.82% 12.41% 2005 4.96% 8.2% 2006-YTD 9.67% 15.24%
Here is what I am getting from 2-June-2003 until today.
I think there is a definite role for this--like now when the market is jumping all over the place but is trending overall up--but seasonally there are blocks of time when the annualized yield is greater than 25% so you might be better off staying in stocks during those periods.
"Should" get the penny on Monday. If the market was up today, I probably would of transferred to the G today. However, since the market is down right now, I'm going all stocks to look for a rebound. That may not be until Tuesday because most earnings calls are scheduled for after market close Monday.
Penny should pay out on Monday and then again on Friday the 3rd. By my calculations of course.................
You are benefiting too much from a convienent rate of return MM....I'd like to see you make the predictions stick over the next couple of years.....thats when it gets dicy.....go for it....
Yep, I concur. Next Monday 10/30, then Friday 11/3, then 11/13 (if the interest rate stays at 4.75). The penny would fall on 11/10 but that's a holiday.
Too bad you won't be around that long huh?
Yeah, too bad for quite a few people....even you...
The G-fund penny should come on Monday. The gain will be equivalent to an annual rate of return of 21.5% (0.086% gain for the day * 250 trading days a year).
Given that the markets are stretched...
Given that today started out red...
Given that Iran is boasting that they have doubled uranium production rates...
The penny is looking mighty good right now... a definite soft spot.