This week taught us the market is clinging to the promise of the AI industry. Indices are reaching new highs thanks to a single company's earnings and forecasts. This week C-fund investors were not holding the S&P 500 but were bound to the market's reaction of its favorite report card: Nvidia.
Nvidia and the success of other AI related stocks have kept investor interested in buying the large cap funds like the C-fund for months. The less deserving companies inadvertently get bought in the process. It's arguable where the market would be priced without the hype of the new exciting sector.
The market did the same in the dot com era along with other bubbles through history where markets accelerate past their ability to follow up on the promise that kickstarted the buying. But the companies that led the hype sometimes come out as giants that can carry markets for decades. Nvidia is already taking its place amongst those giants. Nvidia's market cap in the U.S. is already the third largest and is only behind Microsoft and Apple. The stock price has grown so quickly its market value is now greater than Amazon's and Alphabet's. These companies have been growing for years. Has Nvidia earned its keep?
The Best Trade of the Week
The I-fund took the crown for best return among the TSP funds for the second straight week. The I-fund and its weeklong holders added 1.7% through the four-day week. But again, the few I-fund holders did not have the best return among the TSP Talk AutoTracker.
The S&P 500 gapped down to start the week on Tuesday and with-it a buying opportunity before the Nvidia fueled rally in the second half of the week. A TSP trader who moved from the G-fund to the C-fund on Tuesday would have added 2.3% over the next three days.
That trade was not made among the TSP Talk AutoTracker. TSP Talk investors holding the G-fund coming into the week were not inspired to buy into the early weakness. Only one member increased their stock exposure on Tuesday but chose the I-fund which finished the day at a higher price.
But two members were able to outperform the rest with similar trades both made on Wednesday:
TrevorBull moved from 100% G-fund to 80% C and 20% S-fund on Wednesday. This trade gave TrevorBull a weekly return of 2.1% and the best return for the week among the hundreds of TSP Talk AutoTracker members. Nice trading TrevorBull!
Ripetide17 currently sits at the top for the best return for February among all TSP Talk AutoTracker members. The race is tight for the top prize, riptide17's lead is a mere 0.1% with four days left in the month good luck.
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Good luck and thanks for reading! We will be back here next week with another TSP 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
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