Cautious optimism_strategy application outside the TSP

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Moderator: Aitrus

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Jesrich
Posts: 23
Joined: Sat Jul 08, 2017 11:16 am

Cautious optimism_strategy application outside the TSP

Post by Jesrich »

Hey Everyone,

I read nearly all the discussions on here and have learned a ton. Aitrus, great post the other day. You are a wealth of Knowledge.

I learned of this community in July. I'm loving it, but as someone else said in a previous forum, "cautious optimism" is a great way to describe my feeling towards it.

With that said, how long have you been using a daily strategy and has it shown to provide better returns than any of the TSP funds during the year(s) you used the strategy?

I do realize that the tspcalc only arrived last spring, but there were some mixes that the "older" group was using. Did those pan out and prove to be beneficial year over year?

The second part of my question is what if I were to apply this strategy to money that is outside the TSP. Eg. Find a fund that follows AGG for F for example, such as BND in Vanguard. Is there any restriction on buying and selling ETF's, that would make me a day trader and disqualify me from potential tax benefits?

Appreciate your time and answers.
1st IFT Jul 10,17

PIP-end of 2nd qtr 2017 was 18.46%
PIP-end of Dec,17 23.4%
PIP-end of Jan,18 20.73%
PIP-end of Feb,18 14.25%
PIP-end of Mar,18 9.12%
PIP-end of Apr,18 8.12%
PIP-end of May,18 12.24%
PIP-end of jun,18 12.04%
End jul 11.15%

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mjedlin66
Site Admin
Posts: 1574
Joined: Wed Oct 02, 2013 7:51 pm

Re: Cautious optimism_strategy application outside the TSP

Post by mjedlin66 »

1. I have been using daily seasonal strategies since 1/1/2016. See the attached graph.

2. If you follow seasonal strategies with an IRA, then you are exempt from capital gains tax. There are several financial institution which offer commission free ETFs with free trading.

Image
Owner/creator of TSPcalc.com - "Know your numbers"

SnareMV17
Posts: 176
Joined: Thu Jan 10, 2013 9:06 am

Re: Cautious optimism_strategy application outside the TSP

Post by SnareMV17 »

You can use the tspcalc site to compare two or more strategies side by side. They have even set up many of the top strategies so you can easily select them by name. Compare them with annual returns of the individual funds (also named for easy access) and you will have the answers to most of your questions.

For investing outside of the TSP, as mjedlin66 said, you can easily choose matching ETFs to invest in outside of the TSP for everything except the G Fund. There simply is no such thing as the G Fund in mortal land. Silly mortals! However, in order to take advantage of applying capital gains tax to your earnings instead of income tax rates, you must hold the investment for at least one year and one day. Make one trade inside of that year and you will not be able to take advantage. That’s why it’s actually called LONG-TERM capital gains.

So you have to make a choice. In my opinion, good seasonal strategies (followed correctly), out perform buy and hold strategies over time. Over shorter periods (months, years, etc.) that may not be the case, but over the long haul I believe it is. The decision then becomes increased earnings/income via seasonal strategies or decreased tax rates/earnings via buy and hold. ETFs can be very cheap with brokerages such as Vanguard and the like, so the difference in expense ratios between TSP and some ETFs is practically negligible. The main weighing point is as I described above: higher return but higher taxes, or lower return but lower taxes. Me, personally, I like higher returns. Of course, this all assumes you are investing in a regular brokerage account and not in an IRA. If you are investing in an IRA then it is mostly the same as the TSP only the trade frequency rules are a bit different in order to avoid fraud.

Keep asking to good questions and I can keep supplying long-winded answers. Lol
"Get your money for nothin', and your chicks for free."

Following TSPCalc strategy #64902.

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Aitrus
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Joined: Mon Aug 06, 2012 5:03 pm

Re: Cautious optimism_strategy application outside the TSP

Post by Aitrus »

Jesrich wrote: I do realize that the tspcalc only arrived last spring, but there were some mixes that the "older" group was using. Did those pan out and prove to be beneficial year over year?
Thanks for the compliment, Jesrich. Much appreciated.

I'm assuming that your statement that I've quoted above is referring to my Seasonal Strategies stuff. I started the threads in mid-2014. I'll give a rundown of how the most popular Mixes have performed since then, compared to the C Fund.

Here's a comparison of gclapper's Mix (daily #2252) and Jahbulon's Mix against the C, S and I Funds since 2014. As you can see, both Mixes outperformed the C Fund.

http://tspcalc.com/seasonal.php?ID=2252 ... I-jahbulon
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
"It's not what happens to you, but how you react to it that matters" Epictetus

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Fund Prices2024-03-18

FundPriceDayYTD
G $18.12 0.04% 0.89%
F $18.89 -0.08% -1.71%
C $80.54 0.63% 8.30%
S $79.06 -0.19% 2.55%
I $42.08 0.13% 4.71%
L2065 $16.06 0.34% 6.20%
L2060 $16.06 0.34% 6.20%
L2055 $16.06 0.34% 6.20%
L2050 $32.16 0.28% 5.09%
L2045 $14.66 0.26% 4.82%
L2040 $53.54 0.25% 4.57%
L2035 $14.13 0.23% 4.27%
L2030 $47.04 0.22% 3.98%
L2025 $13.04 0.14% 2.57%
Linc $25.43 0.11% 2.13%

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