TSP Center Seasonal Strategy Revisited and Optimized

[flight23]

FGTBOGSAT is right.

[FGTBOGSAT]

Forget the propaganda about the safety of the U.S. dollar ...

The paper U.S. dollar is not a safe haven!

Buy physical gold and silver today.

[Sptms2086]

The following is related to Seasonal Strategies:

1. Related Article: "Sell In May: A Strategy Worth 26% A Year Since 2001"
Weblink: http://seekingalpha.com/article/584621- ... aily&ifp=0

The above article describes a seasonal strategy of being in stock funds for 5 months and bond funds for 7 months of every year as follows:

JAN-FEB: Bond Fund
MAR-APR: Stock Fund
MAY-SEP: Bond Fund
OCT-DEC: Stock Fund

Using Exchange Traded Funds (ETFs): SPY (S&P 500) & TLT (Long Term Bonds), the author's result was an average return of 15% a year from 2002 to 2012. NOTE: The closest TSP funds would be the C Fund (S&P 500) and F Fund (Aggregate Bond Index).

The author's 15% average return is particularly notable in that his approach is subject to stock market risk only 5 months of the year, and is invested in the safer bond fund the other 7 months.

2. TSP FUNDS: Here's the results from 3 variations of inputs using TSP Funds and the Seasonal Calculator:

(1) USING C FUND (STOCK FUND): Using F Fund (Bond Fund, 7 Months) & C Fund (Stock Fund, 5 Months) gives an average annual return of 14.34% (since 1988).

(2) USING S FUND (STOCK FUND): Using F Fund (Bond Fund, 7 Months) & S Fund (Stock Fund, 5 Months) gives an average annual return of 13.96%% (since 1988).

(3) VARIATION - 4 MONTHS IN C FUND, 1 MONTH IN S FUND (STOCK FUND): Using F Fund (Bond Fund, 7 Months), C Fund (Stock Fund, 4 Months: MAR, APR, OCT, NOV), S Fund (Stock Fund, 1 Month: DEC) gives an average annual return of 15.77%% (since 1988). NOTE: Tried this variation because Small Cap Stocks often do better than Large Cap Stocks in DEC.

RESULTS: For only 5 months of Stock Market risk annually, this method returns 13.96% to 15.77% annually (since 1988), depending on whether you use C, S, or a variation of the two as the Stock Fund - just something to consider.

Best Regards,

Sptms2086