Hello everyone
I recently changed my TSP Allocation to 50% C-Fund, 50% S-Fund, in light of recent small cap stock strength and continued large cap performance over in the C-Fund. BUT ! I-Fund is still a great place to be, and has been the 2026 fund performance leader until now. In my opinion, “stock funds” are clearly the place to be in, and not the G-Fund/F-Fund.
The single biggest driver of the S&P 500 and Nasdaq is the staggering scale of capital expenditure (capex) directed toward artificial intelligence. This spending is directly fueling the global earnings cycle. According to recent Goldman Sachs research, AI-related investment is expected to drive approximately 40% of the S&P 500’s earnings-per-share (EPS) growth this year. The market is rewarding companies showing actual returns on this AI investment.
As a result of this AI boom, Electricians (trades), Engineers, science, math majors will enjoy one word for years ahead: “Employed.” The recent April jobs report revealed that employers added 115,000 jobs in April, crushing the pessimistic consensus estimate of 55,000.
Other positive news impacting the markets are the hopes for US-Iran peace deal or de-escalation which have periodically lifted sentiment, cooling oil prices and reducing inflation fears from energy shocks. Even without full resolution, the market has shown ability to look through temporary war-related volatility.
Corporate earnings (“fundamentals”) activity indicate that 84% of S&P 500 companies reporting Q1 results had beaten EPS estimates, above both the 5-year average of 78% and 10-year average of 76%. Not “in-line with” or “remained consistent with previous quarter” etc, but beaten EPS.
Important to note was that April 2026 was the best month for stock funds since 2020, with massive relative strength showing up in both large-cap tech and international rotational plays. This website hopefully facilitated awareness and resulted in many people considering to be in stock funds in the last few months.
I am positive and optimistic for the months ahead. My desire is to let the data tell me what to do, as such, my opinion is the stock funds are the place to be right now.
Thanks for reading and talk to you soon
-Bill Pritchard
