June 29 Update / TSP Allocation 100% S-Fund

Hello Everybody

This update will be brief, many of you are out next week due to the July 4th holiday…by the time you come back and check your emails, this will be buried at the bottom of the inbox.   With that said:

I remain 100% S-Fund, as that fund, representing small-cap stocks, reflects the top performer currently.   Second runner-up is the C-Fund, representing large-cap stocks and the SP 500 Index.   Folks who are 50%/50% S and C-Fund have a fine allocation, nothing wrong with that.

At the present time, I see no “red flags” or “warning signs” by any of my proprietary indicators to indicate problems ahead.

Iraq tensions remain, however open-source media seems to paint a stabilizing picture in the region.   Time will tell, however crude oil prices have come down somewhat, to $105 a barrel, off their Iraq-panic highs of $107.   If we could get crude below $105 and even miraculously to $103, that would be great.  Ukraine/Russia continues to be an issue, although I have lost track on what “cease fire” or “agreement to pull troops back” we are on now and quite frankly have grown bored with that situation.

I-Fund lags all the other funds, not a surprise due to its international nature and various international markets suffering due to perceived risks and problems.   One interesting development is a deadline of June 30 for Argentina to pay back $1.3B worth of debt it owes to bondholders.   If that date passes, they have an additional 30 days (the way I understand it) to reach a solution (probably August 1) with bondholders or the various credit ratings will consider Argentina in “default” status and downgrade its credit worthiness rating.   This will likely kill Argentina stock markets and may affect ours, temporarily.   Based on my research, most large USA investors in Argentina have bailed out by now, as Argentina is a “we heard this song before” situation.   In the end, speculating how it will affect US markets is playing crystal-ball, and mine never seems to work.   The financial media has not (not really) talked about this story extensively, but I expect it to pick up some traction in mid-July.

Note that the US markets close on July 3 at 1PM Eastern Time, and are closed entirely July 4.   Expect low volumes this week, and any “down moves” are really nothing to loose sleep over, unless on huge volume.   Most market players will be out of the action by Tuesday afternoon, as they (or their drivers) drive east to the Hamptons for the long weekend.

I promised to keep this update short, I get to typing and tend to ramble, my apologies.  

Please continue to share this site with your friends and coworkers, the “stickiest” marketing is word of mouth referrals, from you, to the next guy.   This site has grown tremendously in a short time, and this is largely a result of your referrals.   Thank You and if you believe this site continues to add value to your financial situation and enhance your knowledge of the TSP and markets, please share it with the next person.    I have chosen to not get too wrapped up with pumping out Twitter feeds, Facebook, Google+, etc. etc., and instead focus on delivering a quality, simple to understand, product, to you.  That formula seems to work.  Ultimately, this is your site, designed to benefit you, the TSP participant and other market investors who desire to improve their knowledge and performance.

My TSP Allocation remains 100% S-Fund.

Everybody have a great July 4 holiday !   

– Bill Pritchard

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