TSP Fund Performance
Invest everything in the C-fund. That has been the investment strategy that has worked all year, especially in the first two weeks of June. But when is it time to take profits? And when is it too late to chase? The TSP Talk AutoTracker community thinks not today.
While other TSP stock funds whipped their investors around, the C-fund gave its investors a stream of steady gains in the first four days of this week. While the S and I-fund lost more than 1% on Friday, the C-fund protected the week’s gains and lost just 0.02%. Its accumulative performance this week gave those fully invested a 1.62% gain in their TSP.
The C-fund did not give the best single-day return this week. That came from the S-fund when it rose 1.46% on Wednesday. However, the S-fund fell 2.1% over the next two days giving it an accumulative 0.37% loss for the week. The S-fund’s volatile action may give Buy and Holders heartburn, but it was a tool used in the top five investment strategies this week.
The I-fund struggled the most this week. Political turmoil in France shook the European markets which were already feeling pressure from a climbing dollar. The I-fund produced a gain of 1.11% on Wednesday outperforming the C-fund, but that was its only day of gains for the week. The I-fund fell 1% or more on three of the five days this week. It accumulated a 2.17% loss over the week.
Flying under the radar, the F-fund produced the second-best return among the TSP funds this week. It started the week with a slight loss but produced three days with gains over 0.4% and ended the week with another small gain while stock prices tumbled. It accumulated a 1.3% gain for the week.
Here are the weekly, monthly, and annual TSP fund returns for the week ending June 14:
Deeper Look at the Market
The big event this week came Wednesday when investors were given the Consumer Price Index (CPI) in the morning and the latest FOMC policy statement in the afternoon. The CPI came in less than expected suggesting inflation was easing in accordance to the Fed’s intention. This was a relief after investors faced a Jobs Report the Friday before that suggested the labor market was heating up, a threat to the inflation fight.
Stocks opened higher in response and held those gains into the TSP Trade deadline. Small caps (S-fund) led the rally and the DWCPF index (S-fund) was up more than 2% for the day at the TSP trade deadline. Wednesday’s Last Look Report gives a glimpse of what investors saw 30 minutes before the TSP trade deadline.
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Those early gains slowly faded through the day in anticipation of the Fed’s response to the fresh CPI. The Fed kept their cool, acknowledging the CPI was in the right direction, but penciled in only one rate cut this year. They continue to keep their options open by saying they are data-dependent and are willing to adjust their plans if needed. The market gives a 67.7% probability that the Fed will make a rate cut in their September 18[SUP]th[/SUP] meeting.
Stocks kept most of their gains into the close. But the S and I-fund gave them back plus more over the next two days. The C-fund added to its gains on Thursday and ended near flat on Friday.
There has been a rotation out of the volatile small-caps and into the large-cap stocks that have been steadily producing for some time. This was exactly the case this week among the TSP Talk AutoTracker community this week. But as these indices diverge, one will pull the other its way eventually. It is just hard to say if the small cap (S-fund) bear market will tumble the large caps (C-fund) bull run, or if the large cap (C-fund) bull market will give life to small caps (S-fund).
Learn more about the two in my blog: C Fund vs. S Fund: Which TSP Investment is Right for You
TSP Talk AutoTracker
The non-premium members of the TSP Talk AutoTracker increased their exposure to the C-fund and F-fund this week and decreased their exposure to the G-fund, S-fund, and I-fund.
Among the 700+ active non-premium members of the TSP Talk AutoTracker, the average allocation of the C-fund rose from 28.17% to 29.99% this week. The average allocation of the F-fund increased from 3.02% to 3.35%.
To get there, the average allocation of the G-fund dropped from 34.20% to 33.46%, the S-fund average allocation dropped from 26.24% to 25.36%, and the I-fund average allocation dropped from 4.57% to 3.99%.
The Best IFTs of the Week
Seventy-five IFTs were made across the TSP Talk AutoTracker this week, only five led to weekly returns above the C-fund’s. It may surprise you then that two of those five investors never touched the C-fund this week. That was true for this week’s best performance:
Pickles came into the week holding 100% S-fund but moved to 100% F-fund before the market opened Monday. That gave them the S-fund’s Monday return of 0.52% and positioned them to catch the F-fund’s 1.46% gain from Tuesday through Friday. The result was a 1.99% return for the week, the best across the TSP Talk AutoTracker.
Despite Wednesday giving the most volatile action, three more IFTs made Monday led to returns that outpaced the C-fund:
Hawgjo and eddie3375 moved from 100% S-fund to 100% C-fund on Monday, a move that gave both a 1.88% return for the week. Similarly, Ryecar22 moved from 75% C and 25% S-fund to 100% C-fund on Monday, this led to a weekly gain of 1.68%.
Only Nordic made a move on Wednesday that led to a weekly return better than the C-fund. They moved from the S-fund to the G-fund. This move gave Nordic a 1.79% return for the week.
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Good luck and thanks for reading! We will be back here next week with another TSP Talk Wrap Up. You can read our daily market commentary at TSP Talk - Market Commentary. If you need some help deciding what to do with your account, perhaps one of our premium services can help.
Thomas Crowley
(TommyIV)
www.tsptalk.com
Weekly Wrap-Ups Archive
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The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
