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Time to jump back into I fund???

Posted: Wed Sep 04, 2019 10:32 am
by tyler3535
With all that happened yesterday with Brexit, Hong Kong, what do you think?

Re: Time to jump back into I fund???

Posted: Wed Sep 04, 2019 12:02 pm
by Horaenaut
Europe's outputs are still falling--they might arrest them with their deep rate cuts, but it also depends on the global economy and two of us bigguns are in a trade war right now and on our own shakey economic ground. Britain seems to have stopped a "no-deal" Brexit in October, but they certainly haven't stopped Brexit in general (just delayed it).

The I fund has been safer in recent downturns than C or S, but it still loses in a dump. I wouldn't be loading up on I fund unless your plan is to hang out there until the drop and immediately buy C and S near the bottom--and if you are going to do that you may as well be in the F fund.

The only reason I haven't gotten rid of my I fund at this point is because I don't want to sell them at a loss and lock in my losses from earlier this year. If we get a miraculous upturn of 2.5% before we get a massive correction, the first thing I'm doing is dumping my I and my S funds for bonds.

Re: Time to jump back into I fund???

Posted: Wed Sep 04, 2019 12:36 pm
by tyler3535
Do you see a major correction in the near future? What’s your reasoning the trade war and inverted yield curve? Earnings reports have been pretty solid across the board. I feel like a lot are predicting a sharp pullback this month but I’m not so sure.

Re: Time to jump back into I fund???

Posted: Wed Sep 04, 2019 1:51 pm
by TSPBuilder
Based on the SMA charts, I estimate 1 to 2% increase in the next 1.7 months. I certainly looks more stable than the C or S to trend up for the next few days. The F Fund looks to be at the top of this cycle and preparing to decline. If it miraculously breaks its pattern and continues upward it should reap approx. 1.25% in the next month.

Re: Time to jump back into I fund???

Posted: Wed Sep 04, 2019 4:50 pm
by bloobs
tyler3535 wrote:With all that happened yesterday with Brexit, Hong Kong, what do you think?
Enter I fund on the 17th of September.

Carnac has spoken.

Re: Time to jump back into I fund???

Posted: Wed Sep 04, 2019 5:29 pm
by Horaenaut
tyler3535 wrote:Do you see a major correction in the near future? What’s your reasoning the trade war and inverted yield curve? Earnings reports have been pretty solid across the board. I feel like a lot are predicting a sharp pullback this month but I’m not so sure.
I do see a major correction in the future--I think we're in a bubble and there are lots of world event syringes dangling around that could pop it, or the could inflate it further. The last bubble was collateralized debt obligations (CDOs) for subprime mortgages and the fact that prices were not based on value but on massive capital influx based on faulty risk models that said that the debt would never default; this bubble is also based on massive debt (which might not burst but will drag down consumer spending as birth rates continue to drop in the developed markets) and the shakiness of where we invest our equity.

The current US expansion is the longest on record going back to the 1850s, and it's not based on on value. Consumer spending is high, but it is enabled by cheap credit and is financed by debt. The whole economic recovery from 2008 has been fueled by historically low-interest rates and cheap credit--which creates debt, which gets repackaged as an investment vehicle, which puts us back in a very similar situation to 2007. Debt is too high to be funded by incomes, and we are betting our (retirement) money on the idea that folk will be able to pay it off AND keep consumer spending levels.

The debt is going to slow consumer spending, and there is a lot of it. Student loan debt (which has no collateral) is up to $1.486 trillion, up from $611 billion at the height of the financial crisis and $100 billion in 1990, and 10% of it is in default. Healthcare spending and debt are up too; as the boomers retire and age healthcare spending as a percentage of GDP is up to 18%, when it was was 12% of GDP in 1990. National debt is over 100% of GDP. Unfunded pensions that relied on overestimated growth projections are coming due as a large section of the workforce is moving into retirement age. And regular old consumer debt is at $14 trillion in the first quarter of 2019, surpassing the roughly $13 trillion of leverage accumulated in credit cards, auto loans and mortgages and other debt back in 2008, when those souring loans and securities pegged to them helped to send global markets into a tailspin.

So what value are we investing our savings in with all this debt? Agricultural production is looking scary due to the trade war and a particularly soggy growing season across the center of the country. Manufacturing, as measured by the Institute for Supply Management’s purchasing managers index (ISM PMI) fell to 49.1 for the first time in three years and weaker than all forecasts. European and Asian developed markets are missing their earnings too:

https://www.bloomberg.com/news/articles ... ean-stocks

I'm not the only one that is looking for safe investment vehicles. The 10-year US Treasury note price is high, which means the yield is at three-year low. European and Japanese bonds are making the news for their negative yield rates. I know TSPBuilder sees this as a bond bubble, but I think the bond bubble is fueled by a growing recognition of the equities bubbles, and I think equities are more likely to pop first. Now whether that happens this month depends on trade war news, rate cuts, and other unpredictables. I just think that when it goes down, it is going to go down hard. And as always, no one wants to get too conservative too early (But it doesn't seem to early to me).

Re: Time to jump back into I fund???

Posted: Wed Sep 04, 2019 8:40 pm
by HighRisk
tyler3535 wrote:With all that happened yesterday with Brexit, Hong Kong, what do you think?
I got back in yesterday. Albeit only 25%.

Re: Time to jump back into I fund???

Posted: Thu Sep 05, 2019 1:24 am
by PoorFed
Check out some interesting numbers from the us debt clock website:
https://www.usdebtclock.org/
It’s alarming to see how much debt we are accumulating. Even looking at how much of federal revenues goes towards paying interest on its debt which is the 4th highest expenditure item. I don’t fully comprehend how the feds manipulation of interest rates will have on the government paying interest on its debt but I can imagine that is part of the reason for keeping it low. Imagine if it climbed 1%, 2%, 3%, etc. Federal spending on debt may even surpass the DoD budget which is crazy to think about.

I been pretty aggressive with my investment by sticking to S fund but this year I moved in early January to G and have stayed on the sidelines ever since. Definitely feeling the effects of FOMO...lol.

Re: Time to jump back into I fund???

Posted: Thu Sep 05, 2019 2:43 am
by TSPBuilder
Horaenaut wrote:
tyler3535 wrote:I know TSPBuilder sees this as a bond bubble,...
TSPBuilder does believe this at all. Technical analysis is merely a barometer for the human psyches Fear Factor. It is cyclical and has patterns that are only occasionally disrupted temporarily by specific people and events.

Re: Time to jump back into I fund???

Posted: Thu Sep 05, 2019 12:08 pm
by tyler3535
Great info here. Thanks guys!!!!

Re: Time to jump back into I fund???

Posted: Thu Sep 05, 2019 12:15 pm
by Stitch
Hoping for more bullishness. :)

Re: Time to jump back into I fund???

Posted: Thu Sep 05, 2019 3:00 pm
by TSPBuilder
TSPBuilder wrote:
Horaenaut wrote:
tyler3535 wrote:I know TSPBuilder sees this as a bond bubble,...
TSPBuilder does believe this at all. Technical analysis is merely a barometer for the human psyches Fear Factor. It is cyclical and has patterns that are only occasionally disrupted temporarily by specific people and events.
Correction: Auto-correct struck... TSPBuilder does NOT see this as a bond bubble, Horaenaut.

Re: Time to jump back into I fund???

Posted: Thu Sep 05, 2019 3:48 pm
by Horaenaut
TSPBuilder wrote:
TSPBuilder wrote:
Horaenaut wrote:I know TSPBuilder sees this as a bond bubble,...
TSPBuilder does believe this at all. Technical analysis is merely a barometer for the human psyches Fear Factor. It is cyclical and has patterns that are only occasionally disrupted temporarily by specific people and events.
Correction: Auto-correct struck... TSPBuilder does NOT see this as a bond bubble, Horaenaut.
Yep, I gotcha. Sorry for putting words in your mouth.

Either way it seems like your analysis is predicting an F Fund (Aggregate Bond Index) drop and US large and small caps to grow outside of something "miraculous," and the point of my misattribution was that I think non-SMA signs are pointing to cycle-breaking "miraculous" events.

Re: Time to jump back into I fund???

Posted: Thu Sep 05, 2019 6:29 pm
by TSPBuilder
Correction: Auto-correct struck... TSPBuilder does NOT see this as a bond bubble, Horaenaut.[/quote]

Yep, I gotcha. Sorry for putting words in your mouth.

Either way it seems like your analysis is predicting an F Fund (Aggregate Bond Index) drop and US large and small caps to grow outside of something "miraculous," and the point of my misattribution was that I think non-SMA signs are pointing to cycle-breaking "miraculous" events.[/quote]

I seldom find the F Fund worth investing in so I ignore its' existence. I have been keeping an eye on it only the past month due to its' steady up trend. It wasn't until today's substantial drop across the 10-day SMA that I suspect the current uptrend may have turned. There's no pattern I recognize that indicates if it does continue down that it won't reverse and start back again well before the 50-day SMA base already established in the previous three bounces before the 50-day SMA. I'd still keep an eye on whether it drops lower than that gap above that 50-day base.

All that said, I don't consider 1.25% in a month to be miraculous (especially lately with 1.5 to 2% swings in a day sometimes). Besides, I'm only calculating to get half of the projected cycle because of mistiming the changes in direction of the cycle.

All of this is moot because we are all making educated guesses (I hope :) and some of us are going to be wrong :(

To those of us who made the move, congratulations on todays gain. May we continue to do so!

T

Re: Time to jump back into I fund???

Posted: Fri Sep 06, 2019 3:31 am
by cswift01
Horaenaut wrote:
tyler3535 wrote:Do you see a major correction in the near future? What’s your reasoning the trade war and inverted yield curve? Earnings reports have been pretty solid across the board. I feel like a lot are predicting a sharp pullback this month but I’m not so sure.
I do see a major correction in the future--I think we're in a bubble and there are lots of world event syringes dangling around that could pop it, or the could inflate it further. The last bubble was collateralized debt obligations (CDOs) for subprime mortgages and the fact that prices were not based on value but on massive capital influx based on faulty risk models that said that the debt would never default; this bubble is also based on massive debt (which might not burst but will drag down consumer spending as birth rates continue to drop in the developed markets) and the shakiness of where we invest our equity.

The current US expansion is the longest on record going back to the 1850s, and it's not based on on value. Consumer spending is high, but it is enabled by cheap credit and is financed by debt. The whole economic recovery from 2008 has been fueled by historically low-interest rates and cheap credit--which creates debt, which gets repackaged as an investment vehicle, which puts us back in a very similar situation to 2007. Debt is too high to be funded by incomes, and we are betting our (retirement) money on the idea that folk will be able to pay it off AND keep consumer spending levels.

The debt is going to slow consumer spending, and there is a lot of it. Student loan debt (which has no collateral) is up to $1.486 trillion, up from $611 billion at the height of the financial crisis and $100 billion in 1990, and 10% of it is in default. Healthcare spending and debt are up too; as the boomers retire and age healthcare spending as a percentage of GDP is up to 18%, when it was was 12% of GDP in 1990. National debt is over 100% of GDP. Unfunded pensions that relied on overestimated growth projections are coming due as a large section of the workforce is moving into retirement age. And regular old consumer debt is at $14 trillion in the first quarter of 2019, surpassing the roughly $13 trillion of leverage accumulated in credit cards, auto loans and mortgages and other debt back in 2008, when those souring loans and securities pegged to them helped to send global markets into a tailspin.

So what value are we investing our savings in with all this debt? Agricultural production is looking scary due to the trade war and a particularly soggy growing season across the center of the country. Manufacturing, as measured by the Institute for Supply Management’s purchasing managers index (ISM PMI) fell to 49.1 for the first time in three years and weaker than all forecasts. European and Asian developed markets are missing their earnings too:

https://www.bloomberg.com/news/articles ... ean-stocks

I'm not the only one that is looking for safe investment vehicles. The 10-year US Treasury note price is high, which means the yield is at three-year low. European and Japanese bonds are making the news for their negative yield rates. I know TSPBuilder sees this as a bond bubble, but I think the bond bubble is fueled by a growing recognition of the equities bubbles, and I think equities are more likely to pop first. Now whether that happens this month depends on trade war news, rate cuts, and other unpredictables. I just think that when it goes down, it is going to go down hard. And as always, no one wants to get too conservative too early (But it doesn't seem to early to me).
My inclination is to see a corporate bubble. I think this is fueled by the really cheap rates. If you look here (https://www.marketwatch.com/story/how-m ... 2019-05-02), you see what I mean. They suggest that there is at least a 10% increase of the market due to buybacks. So, let's say hypothetically that companies begin spending less because of uncertainty. If they withhold their spending, they will also borrow less (therefore impacting the rates). They will also do less buybacks, effectively causing a loss in the market. This would cause a myriad of events with the "quants" and trend watchers. Shiller was interviewed a few months ago and referred to this as a self-fulfilling prophecy (https://www.cnbc.com/2019/03/07/shiller ... l-run.html), even if the market is in a good place. That makes me question how solid the F fund will be.

Who knows, at this point its all conjecture. :)

Best,

Me

P.S. Another great read on stock buybacks (https://money.usnews.com/investing/stoc ... e-buybacks).