TSP Weekly Newsletter 
May 28, 2023

It was an extremely volatile but ultimately bullish week for the C and S funds. The C fund closed the week up 0.32%, S fund up 0.28%, I fund down 2.06%, and F fund down 0.52%. This week's price action shows why we made the reallocation to the Grow Model Portfolio on 19 May. Generally, all three stock funds move up and down together. It's not possible to know which of the 3 funds will out-perform on a day to day basis. There are times when conditions make it clear that some funds are riskier than others.

In the 14 May Newsletter, we discussed the chart of the U.S. Dollar and its correlation to the I fund. The chart below shows a breakout of the dollar on 13 May without a corresponding breakdown in the I fund. Over time, there is a very clear inverse correlation between the direction of the dollar vs the I fund. This chart is why we chose not to reallocate into the I fund on 19 May.

The chart below is Friday's close. As the dollar continued to rally, the I fund ultimately did roll over. With the dollar approaching potential resistance at 105.50, we need to watch this price level closely. If the dollar reverses at 105.50, the longer term rally in the I fund will continue.

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