Moving to 100% Fund Allocation in times like this...
James,
With the market moving 1000 points in a day, and folks in a panic, and short sellers dumping, and hopefully vultures swooping in for carrion I would not make a 100% move to anywhere. This is not a speculator’s market.
Look even at the F Fund:worried: – which nobody buys around here, but… Looking at the fund sheet (very boring and not very informative) you can note that you are purchasing a fund with a 45% holding in ‘Asset-Backed Securities’. Folks, those are ‘Mortgage Backed Securities’. Those securities have obliterated the nation’s investment banks. A 45% holding in that crap. Brilliant, just brilliant.
I wouldn’t even hold a 100% stake in the G Fund. Guess the name of the single fund that the Gubmint can raid if their ‘Debt Ceiling Limit’ has to be exceeded before the Congress Critters raise the ‘limit’. That is right, there is a big slush fund we can lob IOUs into for a few days right over there in the G Fund pile. Certainly the Chinese and Japanese will buy up our kited checks in time. Certainly.
In all, however, I think you will do alright in the C Fund. But, that ‘ok’ may not last more than a month. It may, but it may not. There has been NO direction in this market till recently. So on November 1, I would allocate your assets to a mix that buffers another dump, but gives you Alpha for another burp. If the market dumps another 20%, you will have assets to be a vulture capitalist and will have lost ‘only’ 8% - 10%. If we get a quick bump and level off you can take 12% - 14% winnings off the table. And, if we get what seems to be a sustained recovery you can start averaging out of G/F holdings into C/S/I. Hold that thought…
The F Fund. Maybe not. Anyone want to hold ‘Mortgage Backed Securities’ out there.
