New Allocation: 100% F Fund

I have been watching the C,S, and I funds move higher over the past several months. It’s been painful to watch but, the risk/reward ratio was just too high for me. While I did not get the approximate 5% move higher, I did meet rule #1; Don’t lose money

The TSP stock funds are topping out. I expect the stock funds to consolidate, potentially moving significantly lower, before rallying to new highs into 2018. In the mean time, the F fund broke out of a correction and is poised to move higher. We may only get a few % but it should be a better rate of return than remaining in the G fund.

I watch the F fund but don’t ordinarily use it as part of my TSP investment strategy. The market risk in the F fund is higher than the G fund and the potential upside is not nearly as good as the stock funds. However, right now the F fund is the best option for the next several months.

The F fund chart below is a great example of when to allocate into a fund. On Friday we saw a big price move up thru the 50DMA, RSI moving higher, and MACD/Stochastic turning up. There are no guarantees but odds are that the price continues up from here. A close below 109.10 will push me out of the F fund, which is a maximum risk of 0.75%.

The F fund should stay above its 50DMA and test the prior high from early September where it might hit some resistance. I expect to stay in the F fund until a consolidation and breakout in the C fund. This is plan “A” but, as always, the charts will drive decisions…

Please post questions to comments and have a great week.

Jerry