* Alert * : 05 June 2020

New Allocations: 10% C Fund, 10% S Fund, 10% I Fund, 70% G Fund

The market has had an amazing run since bottoming on 23 March.  The C fund is within striking distance of its February top, while the NASDAQ Composite Index ($COMP) ended the week at a new All Time High!  So why reallocate mostly out of the stock funds now??  I have 3 primary reasons for making this reallocation. 

First, rule #1 is Don’t Lose Money!  The price of the C fund is extended 4.2% above its 10DMA, 5.9% above its 200DMA and 11% above its 50DMA.  We’ve made significant gains over the past few weeks.  I don’t want to give those gains back before support at one of the moving average lines.  I want to see the price consolidate back, at least to the 10DMA, before reallocating more into the stock funds.

Second, it’s not about picking the top/bottom.  It’s about Managing Risk!  In addition to the price being over extended beyond the moving averages, the price is bumping up against a significant resistance zone.  IF we are in a Bear Market Rally, the C fund will roll over at or before reaching 3400.  A close above 3400 would be extremely Bullish but, until we get there, market risk is high.

Finally, Friday’s huge price gap COULD be an “exhaustion gap”.  Often times prices gap at the beginning, middle or end of a major rally.  The S and I funds gapped up as well but reversed and closed at the bottom of the day’s trading range (S and I charts will be shown on Weekly Update).

Taken together, I am happy to lock in the significant gains from the past several weeks and allow the moving averages to catch up to the current price level.  This can happen by consolidation or correction in price; we shall see…   

Have a great weekend!



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  1. Good call on moving to G during this resistance/pullback/consolidation. Looking forward to this Sunday’s Live Meeting. It’s been an interesting week so far.

  2. Thank You Sir for saving my Bacon with your recommendation to 80/10/10/10 allocation for 5 June. I didn’t (initially) get on board with the switch to 80% into the G Fund. I had been 50/50 in the S & C Funds for years and had made good progress towards my goal of being a “TSP Millionaire.” The Market Drop in Feb/March set me back on my heels (I thought) for years of obtaining my goal. I drug my two left feet until Monday (8 June) to make the switch and gained almost 100% of what I lost in Feb/March crash (C & S Funds). Tuesday, Wednesday and today made be a true believer in the 80/10/10/10 switch. Solid advice and explanation (on the Sunday Broadcast) from you convinced me to switch. Thank You Again.

    1. Thanks Mark! The “TSP Millionaire” is a great goal! It requires you to be in the stock funds when the market is trending up BUT, you need to manage risk and preserve those gains. Sounds like you’ve done very well in 2020!

  3. I just subscribed and my allocations are currently at 40%G, 50%C, and 10%S. Would it make sense to align my allocation to yours immediately before OR after the July 4th holiday given the recent gains?

    1. Haha.. I was late with the final Alert post due to travel. Fortunately, the market is closed until Monday.. More to follow in the Weekly Update and the Weekly Update Show on Sunday night.

  4. hello Jerry, I am Dr. Chhina- joined your website today- I am a VA Physician -my funds are in TSP G funds all of them- very new to investment/funds – need help to understand the process , how you work. I am reading very positive comments above.