Good evening, TSPwire Tactical Investor!

We were right on point with our prediction last week. I and C Funds showed very solid performance last week. At the same time F Fund dipped lower and we managed to pull out our funds out right before that happened. What was good news for stocks – the economy appears to be slowing but not plummeting – was bad news for bonds which fell sharply as investors grew worried about inflation and lowered their hopes that the Federal Reserve would cut interest rates again. 

Investors’ perception turned 180 degrees last week. Only few days ago investors we running away from stocks and now they think that it is safe to return – move that drove markets to a record high. Much of the buying is driven by the notion that stocks are a safer bet than a risky debt. Even ultra-short bond funds, that until recently were considered to be a viable alternative to money market accounts, do not seem to be so safe any more.

Our models yielded similar results this week. I and C Funds got the best scores and finished with STRONG BUY signal. S Fund came third with a BUY and F Fund finished last with STRONG SELL signal. Last week we inched closer to our target sell level. C Fund finished week only 8.12% away from the target price. Note: once C Fund will hit $18.90 we will move out from stocks due to high probability of stock market correction.

After all considerations we decided to keep our allocation at 50/50 levels in C and I Funds.