April 2022

Allocation Percentages for April 2022
F Fund

0%

C Fund

100%

S Fund

0%

I Fund

0%

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March 2022 is in the books, and we have a fair amount to talk about.  First, returns this month were actually quite decent at 3.72% for the C Fund.  As I stated last month, I do not see a safe haven for the issues we are facing, but I felt the C Fund would give us the best investment considering the high inflation we are seeing.  The G Fund is reflecting the increase in interest rates by the Federal Reserve but will still fall far short of the actual inflation rate. The F Fund is going to continue to suffer while inflation remains high as well.  Investors will seek returns that can beat inflation and only the market has that capability.  The S Fund is being impacted by inflation as well as small caps usually have a higher WACC (weighted average cost of capital) and with an increase in interest rates they will be disproportionally impacted compared to the companies in the C Fund.  This is not enough to warrant a complete avoidance of the S Fund, but smaller caps are also going to be vulnerable to increases in energy and labor costs-driving me completely away from the S Fund at this time.  Finally, the I Fund is off my radar for the technical issues prevalent in that market and the worldwide uncertainty due to the conflict in Ukraine.

Looking forward, we saw a very concerning event with an inverted yield curve this week.  The spread between the 5-year notes and 30-year bonds inverted for the first time since March of 2006.  For many of you, I don’t have to remind you of what happened just a year later.  But for some of my younger readers, Bear Sterns collapsed 12 months later, followed by Lehman Brothers 6 months after that.  My parents remembered where they were when JFK was shot, I remember where I was when both of these events happened.  Now, an inverted yield does not mean the collapse of our banking system, but it does mean our market is out of sync with the economy, and many people think this is a harbinger of a recession in 6 to 12 months.  Breaking from this thought, I think it means we are at a higher risk for a recession unless actions are taken.

With all the above in mind, I’m still comfortable remaining 100% in the C Fund.  I still think there is really no good safe haven, and the C Fund, although still risky, is the most protected fund.  Keep Investing!

 

           
  

TSP FUND QUOTES

Date L Income L 2030 L 2035 L 2040 L 2045 L 2050 L 2055 L 2060 L 2065 L 2070 L 2075 G Fund F Fund C Fund S Fund I Fund
2025-06-30 27.9579 54.0610 16.3639 62.4426 17.2069 37.9654 19.3201 19.3178 19.3155 11.4479 10.0000 19.1711 20.2603 98.6743 92.0521 49.7247
2025-06-26 27.8773 53.7489 16.2611 62.0189 17.0827 37.6752 19.1450 19.1428 19.1404 11.3441 0.0000 19.1616 20.2330 97.6432 91.4042 49.3273
Daily Change 0.29%0.58%0.63%0.68%0.73%0.77%0.91%0.91%0.91%0.92%INF%0.05%0.13%1.06%0.71%0.81%
Month to Date 0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%
Year to Date 4.55%7.17%7.62%8.06%8.44%8.79%9.88%9.88%9.88%9.9%0%2.22%4.02%6.18%2.11%18.69%
Details L Income L 2030 L 2035 L 2040 L 2045 L 2050 L 2055 L 2060 L 2065 L 2070 L 2075 G Fund F Fund C Fund S Fund I Fund
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