I am a novice is this particular discipline so I was hoping for input on F vs G. I like the F returns but have noticed that F is tracking more closely with C/S these days instead of inversely. I keep reading articles about potential turmoil in bonds and am getting nervous. Was hoping Sarah (or anyone else) could help me understand what we are looking at. I follow the group and am currently 100% F and considering a move to G. This market seems much different than anything we have seen in the past.
Excellent question.
We're currently in a rather unusual situation. Most world markets are bearish, with interest rates NEGATIVE. The US markets are the best of the lot, altho far from fully bullish. (Dow Theory is still bearish, for example) While interest rates are extremely low in the US. they are fairly high when compared with world markets.
Fed is said to be considering raising rates to temper a potential stock market surge. However, given the state of world markets, the question is, can US markets sustain themselves with higher interest rates?
In this instance, the Fed may simply be "stating" that they are considering raising rates to avoid having to do so.
As you know, higher interest rates favor the G fund. Lower interest rates favor the F fund.
All of this said, may US interest rates actually go negative in the near future?
https://groups.yahoo.com/neo/groups/TSP_Strategy/conversations/messages/40378
Or will interest rates rise?
I'm still in wait and see mode.
Posted by: sarah_oz@yahoo.com
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