What's your criteria for selecting between C or S Fund when making an IFT?

[jpcavin]

What criteria do you personally look for to determine whether to move to S Fund or C Fund? I often hear folks say, "S looks a little better" or "C has more potential." I look at both and just scratch my head. How do you arrive at your decision to pick one over the other?

 

[JTH]

What criteria do you personally look for to determine whether to move to S Fund or C Fund? I often hear folks say, "S looks a little better" or "C has more potential." I look at both and just scratch my head. How do you arrive at your decision to pick one over the other?

Statistically speaking, the S&P 500 does better in the beginning of the month, and the mushy middle. At the end of the month W4500 tends to outperform. These past few rallies the large caps have been outperforming, I believe this speaks to the uncertainty and underlying insecurity of the markets as a whole. Once/if these issues are resolved, I think the small caps will resume their traditional role as the leader.

 

[MrJohnRoss]

What criteria do you personally look for to determine whether to move to S Fund or C Fund? I often hear folks say, "S looks a little better" or "C has more potential." I look at both and just scratch my head. How do you arrive at your decision to pick one over the other?

I like to use a relative strength analysis, using the S Fund price divided by the C Fund price. I've shown it before, but here's what it looks like:



C was outperforming S over most of last year, but the tables turned at the beginning of Dec., as S has been leading. As JTH said, C has been pulling ahead in the last couple of days, but unless that lower trend line is broken, I would consider S to be the leader.

 

[jpcavin]

Statistically speaking, the S&P 500 does better in the beginning of the month, and the mushy middle. At the end of the month W4500 tends to outperform. These past few rallies the large caps have been outperforming, I believe this speaks to the uncertainty and underlying insecurity of the markets as a whole. Once/if these issues are resolved, I think the small caps will resume their traditional role as the leader.

Thank you for the statistics.

 

[jpcavin]

I like to use a relative strength analysis, using the S Fund price divided by the C Fund price. I've shown it before, but here's what it looks like:

View attachment 31935

C was outperforming S over most of last year, but the tables turned at the beginning of Dec., as S has been leading. As JTH said, C has been pulling ahead in the last couple of days, but unless that lower trend line is broken, I would consider S to be the leader.

You must represent the technical. :laugh: Is the black/red squiggly the S and the light blue the C Nevermind, thats MA. Which represents S and C?

 

[MrJohnRoss]

You must represent the technical. :laugh: Is the black/red squiggly the S and the light blue the C Nevermind, thats MA. Which represents S and C?

Divide S by C. Do that over time and plot the data points. What you'll get is a line.

Every data point is represented by the red/black line. When the line is moving higher, S is getting bigger than C, so it's "outperforming". When S is getting smaller than C, the line slopes down because S is "underperforming" C.

It's an easy way to look at a chart and see what is happening with the relative strength between the two. You can also use standard moving averages, PPO, Stoch, BB, etc, just like any other stock chart.

Easy peasy.

 

[jpcavin]

Divide S by C. Do that over time and plot the data points. What you'll get is a line.

Every data point is represented by the red/black line. When the line is moving higher, S is getting bigger than C, so it's "outperforming". When S is getting smaller than C, the line slopes down because S is "underperforming" C.

It's an easy way to look at a chart and see what is happening with the relative strength between the two. You can also use standard moving averages, PPO, Stoch, BB, etc, just like any other stock chart.

Easy peasy.

Ok. I get it now. One line......Up-pick S, down-pick C. Thank you.

 

[MrJohnRoss]

You're welcome. Stay warm in Pensacola tonight. I hear it's gonna get chilly. :-E

 

[jpcavin]

I duplicated your chart just to make sure I could get same result. I learned something new tonight. Thank you, John.

 

[Fran1775]

Awesome info guys as always

 

[nasa1974]

One of the big differences is that the S fund has bigger swings high and low vs. the C fund. The C fund tends to be a little more stable than the S fund because of the large companies established in the C fund.

 

[ravensfan]

I like using my "Best Fund, Worst Fund" that I post on my "ravensfan's Account Talk". It's not fancy, but does provide the best and worst performers over the past 15 and 60 business days.

 

[BigJohn]

What criteria do you personally look for to determine whether to move to S Fund or C Fund? I often hear folks say, "S looks a little better" or "C has more potential." I look at both and just scratch my head. How do you arrive at your decision to pick one over the other?

My advice is much more technical so hang with me...look at the last 30-90 days of share prices.................................and see which one has moved higher.

 

[MrJohnRoss]

As with any "system", you always need to ask yourself one simple question...

"How's that working out for you?"

If you like the answer, stay with it.

If you don't like the answer, you might consider a change in tactics.

 

[Greybeard]

Two factors to consider:

First, seasonality. For example, the "January effect" strongly favors small caps (S fund) over larger caps (C Fund). There is a nice chart on fidelity.com that I've printed and keep in a file showing seasonality month by month over the last, I think 45 years. Some months favor C Fund.

Secondly, think "the trend is your friend." If C has been running hot for several months, this, and the factors driving it, can override the seasonality indicator. While thinking "the trend is your friend," don't leave out the I Fund. There was a long period when the I Fund was kicking butt. I locked into it and didn't budge. Right now I is dead meat.

My current allocation, when in stocks: S.

Current allocation: 100% S. Good Luck.

 

[jpcavin]

As with any "system", you always need to ask yourself one simple question...

"How's that working out for you?"

If you like the answer, stay with it.

If you don't like the answer, you might consider a change in tactics.

Sound similar to something out of Carlos Castaneda's book The Teachings of Don Juan. "Look at every path closely and deliberately. Try it as many times as you think necessary. Then ask yourself alone, one question . . . Does this path have a heart? If it does, the path is good; if it doesn't it is of no use.”