I Fund Thoughts

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This topic contains 1 reply, has 2 voices, and was last updated by  TS Paul 4 years, 3 months ago.

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  • #14384

    rolfeskj
    Participant

    Currently I am G:5, F:10, C:35, S:25, I:25 with about 21 years until forced retirement. I have been looking to get into the I fund though out this recovery but it has not preformed well. From the numbers I am looking at from tsp.gov since 12/11/07 the G fund is up 19%, F fund is up 40%, C fund is up 59%, and the S fund is up 78%. Only the I fund is still negitive at -1%. To me it seems like it has a ton of growth in it but I have put money in it and lost out on what I could have made in the S fund. What are your thoughts on the I fund, when and will it take off? I dont want to miss the growth in I fund but I am lossing money waiting for it. Thanks.

    #14708

    TS Paul
    Keymaster

    Sorry for the late response – I wrote a long reply a few weeks ago, but apparently something went wrong when I hit submit and it didn’t take for some reason.

    The I Fund is a developed markets fund, so it is largely comprised of European and Japanese stocks. Both Europe and Japan seem to be stuck in neutral right now, with Japan dipping into recession (two straight quarters with negative GDP) and Europe right on the edge.

    I tend to think the Japanese recession will be short and shallow and Abe’s government will be aggressive in trying to get things back on track, but Japan is hamstrung by an odd economy which is very dependent on manufacturing and has an aging, shrinking population which makes it hard to generate growth.

    Europe is just a mess to try to manage. The European Central Bank does not have the ability to be as aggressive as the US Federal Reserve does, and with interest rates already at zero, doesn’t have some of the basic tools to try to move things in the right direction.

    So I feel the I Fund is stuck right now. At some point it is going to start moving and will likely have a decent run-up when that happens, but until then I think it will stay flat and there is some potential for further declines if the economies discussed above continue to flounder.

    I will keep looking at economic news out of Europe and Japan to try to figure out when that move might come, because when it does the I Fund could easily have a 30% year. But right now I feel that I can predict gains in the S Fund and C Fund over the next few quarters, so I won’t move money out of those in hopes the stars will align for the I Fund.

    The TSP Allocation Guide www.TSPallocation.com

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