Transfer 7/7 for 7/8/04

[tsptalk]

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mrhaslam wrote:

Thank you for the advice Tom. Could you please explain your reason as to why the F fund over the G. Also, since I have been invested in the F, it has gradually increased. I changed my allocation about 2 weeks ago when it was down around $9.94. As of yesterday it was around $10.09. I guess it is just beginners luck. I could reckon that this is a good move for the short term. As for the C fund I would think that I got hit pretty hard, but is this the time that I should be putting more into it? This is soooooo much fun!

mrhaslam:^

Hi Mr H -
The F fund does best when interest rates are falling so, since interest rates are now starting to rise off historic lows, the F fund will not be a great investment over the next several months (years?). That is why if you choose to not be 100% in stock funds at this time, I would recommend the steady G fund fund over the F.

The F fund started to fall in March whenevidence ofthe economy heating up surfaced. The recent strengthwas nothing more than bonds coming off an exaggerated sell off. Sort of like when stocks are oversold. Your timing was good during that dead cat bounce, but your "luck" may run out if you plan to stay in the F fund for a longer period of time.

The stock funds have been consolidating for several months now. I believe we are getting very close to the next leg of the bull market. So yes, I believe this is the time to be getting into the C, S and or I funds.

That's just my opinion. Does that help?
Tom

 

[Rolo]

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tsptalk wrote:

The stock funds have been consolidating for several months now. I believe we are getting very close to the next leg of the bull market.

Really close, or, like, Second Coming close? <snicker>

Arewethereyet?Arewethereyet?Arewethereyet?

mrhaslam wrote:

This is soooooo much fun!

That's the spirit!

[One of us! One of us!]

 

[Mike]

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I'm staying away from the I fund in the short/intermediate term - the dollar will certainly strengthen in the rising interest rate environment, which could make things difficult on the I fund.

55 C / 45 S for me (will be slashing my S investment in half in the intermediate future (probably within 6 months).

Small caps tend to do the best early in an economic recovery, then lag behind as the economy pushes further into its expansion cycle. I'd say we are fast approaching this point and will likely see the S & P make the larger gains.

 

[tsptalk]

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Mike wrote:

I'm staying away from the I fund in the short/intermediate term - the dollar will certainly strengthen in the rising interest rate environment, which could make things difficult on the I fund.

Mike -
That is what I have been saying for weeks now and the dollar just keeps falling. I missed a nice part of the recent run up in the I fund because of it. I have been surprised how weak the dollar has been during this economic recovery. Warren Buffet had said the dollar will continue to weaken and I thought, what in the world is he thinking? Well, he has been right.

Check out the chart. I thought we'd get support at point A, then certainly at point B, but neither has held.

Chart provided courtesy of [url]http://www.decisionpoint.com[/url]

The dollar is down again this morning.

Also, I agree with your analysis on small caps (that they do best early in an economic recovery) however, interest rates are still quite lowand the economy is notexactly setting the world on fire, so I think small caps can continue to do well in the intermediate term (3 to 6 months).