August 2020

Welcome to August, the month of summer vacations, back to school activities, pre-season NFL games, the baseball is in the final stretch, and COVID? Of course, all the above has radically changed since March of this year. Making investment decisions has been particularly tough this year with the almost totally uncertainty this virus, the accompanying panic, massive cash infusions in the market, record unemployment, and general systematic disruption to our economy. As most of you will have noted, I have stayed with the C Fund for the entire year. This is despite the F Fund's steady success and returns throughout the year of 1-1.9% with one down month. My rationale for avoiding the F Fund, unlike the Lifecycle funds, is I see it not as a hedge against the C, S, and I but as a safe haven when those three funds show signs they will all be strongly negative. Investing in the F Fund will almost always lower my returns compared to a straight investment in one or all the C, S, and I Funds. I had very strong signals this year to move to the F Fund, but most of that was driven by fear, and that is not how I invest. For August, I think we are still going to see flat to moderate returns. Again, not because companies are doing well, but because of the cash influx into the economy. I also think any political disruptions will probably be delayed until September or October-this is the hardest to plan for as they are always so unexpected. Here's to a vaccine and to August 2020! Keep investing!