Hot Fund for 2007

[Griffin]

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What will be the hot fund for 2007, If you’re a bull there are two obvious choices, but which one?

When you look at the ten year annual returns of the two, there have been some big differences. In the last few years we have seen this difference drop and they have been fairly competitive. However, here we are in 2006 and the S-Fund is at about 15% and I-Fund is pushing 25% almost a 10% difference putting the I-fund at 1.6:1 ratio ahead of the S-fund.

In 2005, the foreign markets spanked the US market but the dollar was also a big winner. In 2006 the US and foreign markets have been relatively competitive but the dollar has been a big loser. Al Greenspan says we should expect the dollar to continue to be a big loser for another couple of years. We also saw Warren Buffet make big moves into the foreign market this year.

So here are the options:

1) Despite what the big guys say, the dollar begins a big recovery – and the US markets stay competitive – the S-Fund should be the winner.

2) The foreign markets continue their tear while the US experiences economic slowdown and/or recession. The dollar continues to languish in the low 80’s and the I-Fund is the clear winner.

3) The dollar begins a minimal recovery but Europe and Japan see weakening of their currencies as inflation and deflation (respectively) pressures build. The US economic slowdown is minimal and goldilocks lives on making the US market competitive with the foreign markets with a net result that it is a wash. They come in about even

What’s your thoughts?

P.S. - Birch - you don't need to tell us "neither - the C-fund is the way to go" - yeah we know what you think.

 

[ATCJeff]

I plan on starting the year in the I fund.

I see the dollar to continue it's downward march. Right now the US trade deficit is to large. A weaker dollar will help reduce the trade imbalance.

Bonds continue to bounce around keeping the 10yr around 4.6-4.7% range. I believe we will not see a rate change before summer, if not later.

The C fund is for the conservative. No way will it surpass the S or I fund next year or the year after!

My two cents......

 

[Fivetears]

I think more OPEC induced oil production cuts and increased global acts of terrorism will make it harder to call the TSP markets using our normal methods in 2007. Otherwise, I see the I-Fund outperforming all others in 2007, due to a continued deflating USD. We can't keep pumping can after can of "fix-a-flat" in a tire full of nails, and expect it to hold air. The S-Fund will have its good months (like this year), but nothing steady enough for a "no-touch" BAH. I think the C-fund will nickel and dime it in an upward direction for most all of 2007; good enough for a "no-touch" BAH. Fire away and/or diversify at will. Get your game faces on, and let's make some big money. Good luck to all for 2007.

 

[ATCJeff]

BTW, here are my EOY 2007 share prices.

G fund 12.15
F fund 11.87 (no recession)
C fund 18.01 (15.80 EOY 2006)
S fund 23.65 (19.15 EOY 2006)
I fund 31.29 (22.35 EOY 2006)

Needless to say I'm planning on a great year in 2007!

 

[Birchtree]

You can't find refuge in the herd. And you must resist the urge to join the crowd. Perspective and patience are rewarded, IMHO. Let it snow.

 

[Brett]

My biggest challenge is self discipline. I kick myself for being so greedy. I stay in too long, then I jump back in on the first up tick. So, my new-years resolution is to be more objective, less emotional, to stay on the side-lines even when some others are making money in a weak market. I don't want to be like a dear that waits until the last moment before a car passes, and then trying to dash across the road.

 

[Birchtree]

It is far easier to make money in a secular than cyclical bull market. BAH (buy and hold) works if stocks are going to rise steadily for several years. You simply have to learn to absorb some punishment on accasion.

 

[pointman72]

Griffin,

Great Question.

My response is ME!!! (sorry couldn't resist).

Seriously in MHO:

Funds: I fund (20%) followed very closely by S (18%).

Individually: it will be anyone who does a BAH for the I fund but avoids the downhill slides. Believe 30% is a real possibility.

Have a great holiday all.

 

[Griffin]

I dig your attitude! I did not intend to make this sound like a BAH strategy, merely a focal point for timing. Your strategy of holding until the big dips, has me inspired. I am looking to do exactly what you have been doing this year but with a multi-fund approach, by adjusting my weight between the S and I as the year goes in response to the dollar index.

I'm very bullish for next year, so I intend to keep my CP time under a couple of weeks (hopefully only for the one or two big events of the year).

Griffin,

Great Question.

My response is ME!!! (sorry couldn't resist).

Seriously in MHO:

Funds: I fund (20%) followed very closely by S (18%).

Individually: it will be anyone who does a BAH for the I fund but avoids the downhill slides. Believe 30% is a real possibility.

Have a great holiday all.

 

[Spaf]

So here are the options:
1) ..... 2) ..... 3) .....
What’s your thoughts?

Looks like a very good analysis......

My thoughts are minimizing risks for those near or in retirement.
100% G is no risk, but minimum rewards.
100% I is the higher risk but can give the maximum rewards. Noting that I has a two-edge blade (price and dollar).
TSPTalk helps in knowing when to fold them.

At some point you have to figure out a comfortable allocation..... ......for Trading or B&H. My thoughts are that the nest egg should be pretty much where you want it. Using investment skills improves your chance of keeping and safe guarding the egg.

One thing I found out! I should have gone 100% G-fund three month prior to retirement and stayed there till three months after retirement. Some folks may need a little less/more time.

End of of July is a good date! Rest up Aug-Sept-Oct. And restart the good months in November......

 

[SkyPilot]

IMO, the G fund is actually a kind of risk fund too, as it may or may not keep pace with inflation. The G is little better than the "mattress index" as one who holds only G will likely find themselves at "risk" of inadequate returns at retirement. However, it functions as a great safe haven for position and swing traders.

Peace,

 

[robo]

"Will 2007 be a Bull or Bear Market"?

The Top Monkeys outlook for 2007: Bullish

Your ability to pick Funds is only limited by your ability to throw darts.

However, I favor large cap with Birchtree. When I go 100% long with the stock portion of my portfolio it will be C Fund 60% and 40% S Fund or I Fund dependent on the dollar and current Market conditions. When unsure 20/20 split.

 

[Fivetears]

This could make a neat side game for 2007;
Predict the 2007 Closes
Closest wins ... eh... hmm...
AH!!! a PayPal Pool, $5.00 buy-in board pool entry fee! :nuts:
Ties are split.

BTW, here are my EOY 2007 share prices.

G fund 12.15
F fund 11.87 (no recession)
C fund 18.01 (15.80 EOY 2006)
S fund 23.65 (19.15 EOY 2006)
I fund 31.29 (22.35 EOY 2006)

Needless to say I'm planning on a great year in 2007!

 

[azanon]

Looks like a very good analysis......

My thoughts are minimizing risks for those near or in retirement.
100% G is no risk, but minimum rewards.
100% I is the higher risk but can give the maximum rewards. Noting that I has a two-edge blade (price and dollar).
TSPTalk helps in knowing when to fold them.

The G fund is only "no risk" to those not familiar with the eroding effects of inflation. Also, what about the "risks" of missing out on market gains over a long period of time?

To me, the G fund is the most risky fund in the TSP selection, but one will only make sense of that standing outside of the box.

 

[Spaf]

The G fund is only "no risk" to those not familiar with the eroding effects of inflation. Also, what about the "risks" of missing out on market gains over a long period of time?

To me, the G fund is the most risky fund in the TSP selection, but one will only make sense of that standing outside of the box.

Azanon,
Your view point is valid. The G-fund is a slow boat.
My comment was strictly concerned with "risk"
Concerning TSP funds, the G-fund has the minimum of risk!
The S and I funds to me have the maximum risk.
Notice the Life-Cycle funds and how they pair down as one approaches retirement.
My thinking, is that near or in retirement one should have their nest-egg pretty well established. They should have an allocation that would maximize capital preservation, cover inflation and etc.
When you get to retirement you should have your egg at minimum risk.
However, if you are a trader and know what you are doing, you can take a different path.
MHO, risk has to be considered, when playing with socks!
Regards
Spaf

 

[Propstrike]

I think C will be the top performer in USM through at least the first two quarters, if not the entire year. International fund will slow down but still outpace the USM.

 

[Birchtree]

If the ratio adjusted NYAD line goes to new all time highs - this wave 3 would then be of "Primary" degree instead of intermediate degree. Primary degree would give us upside price objectives that would make some shake their heads in amazement. Fivetears is being way too conservative in his price targets. It's almost magical. Silver Bells.