Update for April 2nd

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Since our allocation change on 3/14 we've been mostly horizontal in price movement:

G-Fund:  Up +0.043%  (@ 60% allocation)
F-Fund:  Up  +0.009% (@ 3% allocation)
C-Fund:  Up +0.115% (@ 15% allocation)
S-Fund:  Down -0.008% (@ 11% allocation)
I-Fund:  Up +0.008% (@ 11% allocation)

This is poor performance in the markets in general and is not indicative of the allocation amounts.  I generally think that the mix is correct -- bond yields (F-Fund) are on the rise, so we should see bond prices fall.  Rallies are typically led by small caps (S-Fund) so the fact that they are lagging here is indicative of a tired market, hence the lower allocation than the larger C-Fund (S&P500).  We need some international exposure (I-Fund) and in general, the I-Fund goes as the C-Fund and S-Fund, especially as of late, so I continue to keep my eye on this correlation.

Noting that we are at 40% exposure (60% in G-Fund, which is "cash"), I do not see any compelling reason to re-allocate at the present time.  Furthermore, in terms of local cycle, it is quite possible we could be heading downward, as this bull leg is getting quite tired, or alternatively, we could be heading higher through May.  As an example of thinking of this latter point, refer to this chart from Mike Turner, which was forwarded to me by one of our GGT members:

Of course, your crystal ball is as good as mine, and perhaps just as good as Mr. Turner's.  Caveat emptor.

Stay the course until it changes.

Regards,

pgd