I do not love the TSP Lifecycle funds for investing, but I do love them for the easy info they provide me.

The graph shows the L 2055 lifecycle fund allocations. 99% stocks. All at risk. The ratios of the three equity funds match the market value of those funds relative to one another. The TSP C fund (SP500) holds over half of the developed world’s market value at 51%.

Two thirds of the world’s developed country stock markets are the US market (TSP C and S fund) and only one third is all other developed countries (TSP I fund).

The TSP lifecycle funds provide a quick and easy way of seeing this data.

It gets more crazy when you see the TSP S fund or the non-sp500 fund equals only 25% of the SP500 (TSP C fund) market value today. Why is that crazy? Because the non-sp500 (TSP S fund) has over 3500 stocks compared to the 500 in the SP500.

Now on to real crazy..

The 4 largest companies in the SP500 have a HIGHER value than the market value of the total 3500 US companies in the TSP S fund (the US non-sp500 companies).

Is that sinking in? (4 vs. 3500)

This is the most unbalanced market ever.

No really, ever.

I have held in my mind for a long time that the top 50 companies in the SP500 account for 50% of its value. I reviewed it today and it is now 60%. Most of the gain are in those top 10.

Why does this matter?

Well, most of the US market peaked in March and is now trading lower. But you would not know that looking at the SP500. Something happened in mid-May and the few mega cap stocks took off and the rest of the market is down slightly.

This is not healthy for the market.

Sorry, if 4000 stocks are down while only 50 are up, do not chase this market.

I could go on. And I do go on here if you want to learn more non-mainstream facts. I am a macro advisor not a tactical advisor. I love this stuff.

Michael Bond

TSPsmart.com

Categories: Perspectives