Note that what I meant with you would have been just fine...would be an easy feeling (one that I felt in the past too) and is what you described. I wasn't saying you would be fine for sure. As they say in the market, nothing is for sure.bloobs wrote: ↑Fri Jan 05, 2024 5:00 pmNot really. SD (standard deviation) simply measures the "spread" of data point values over a date range that has already happened. A calculated SD does not forecast any future period's SD--even though it can be inferred. I (re)learned that lesson the hard way in 2022 when i picked #148233 as my base strategy for my TSP specifically for its low SD.
The worse part was that I assumed......, no I BELIEVED, that this strategy with 17 years worth of immutable data showing an SD of 3.4 percentage points wouldn't stray far beyond its annual 26.7 +/- 3.4% performance range (26% is its CAGR and 3.4% is its SD.)
Guess what? It promptly hammered home a grisly double-digit loss in 2022. I also ignored the fact that it had returned a "measly" 15% in 2021.
My overall takeaway is that while diligently using a scientific risk management approach by using seasonal investing's quantifiable measures is a lot better than going with your gut (or worse, believing the loudest talking head on TV)--it is not foolproof and certainly not guaranteed.
I remind myself what seasonal investing just is: it is the analysis of historical market data to detect REPEATIBLE (and henceforth probably "predictable") price action patterns. It ignores price action-based trends, technical analysis, and economic/corporate events analysis, and also thankfully, Jim Cramer.
What's getting my attention is that many that I'm following are saying we should go lower through March and have a bad July. The more I read, the more it feels like the market likes to embarrass people. It seems like what people expect is not the most likely move. I guess we'll see. For now, I'm comparing this year to 2004 and 2016. I'm leaning a situation more comparable to 2016...but it could also be 2004 (or some other time!). It's never perfect.