TSP Center Seasonal Strategy Revisited and Optimized

What's new at TSP Center as well as discussion of features that are due to launch shortly.

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TSPking
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TSP Center Seasonal Strategy Revisited and Optimized

Post by TSPking »

A new Professional FantasyTSP account (Seasonal) has been setup to follow this strategy starting in 2010. Since the allocation changes are predetermined and not subject to change, I went ahead and backfilled IFTs for 2008 and 2009.

A friend I work with spent a lot of time studying this concept and came up with a consistent 6-trade allocation model that when applied for the past 22 years results in oustanding returns that greatly outperforms the individual funds:
  • January: 100% F Fund
  • February: 100% G Fund
  • March - May: 100% C Fund
  • June - October: 100% F Fund
  • November: 100% C Fund
  • December: 100% S Fund
The result is if you started at the inception of TSP in 1988 with a $100,000 balance and made no further contributions, you would have 2.4 million in your account today!

A couple of points my friend likes to point out are:
  1. Averaged 16.24% over 22 years.
  2. Only one losing year over the past 22 years
  3. Realized the greatest benefit in the bloodbath years (2000-2002 and 2008) as this strategy actually made money while everything else tanked.
The easiest way to really understand what I'm describing here is to visit the Seasonal TSP Calculator and look at the default allocation/calculation.

I'm interested in what others think of this. BTW, the strategy made 48.13% in 2009.

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It's a gift...and a curse ~ Adrian Monk

crondanet5
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A while back

Post by crondanet5 »

on my Commodore 64 I set up a simple program to analyze how much life insurance I needed to provide for my family after Social Security and military pension. I could change the amount of insurance, run the program, and view the results. Of course, with the limited processor available at that time, it took 4 days to run the program, but it helped determine my needs. So I am wondering if some enterprising person in King's office can set up a similar "chassis" TSP program that would hold every fund's daily return, by year that would allow us to plug in various IFts to see if we can do better than the 6 IFT program you've outlined above. It wouldn't be as difficult as proving the existence of time, and it may already exist in some savvy investment firm, but if it was available on this web site it might really help a lot of members improve the value of their accounts. Does anyone see the logic of this or am I still enjoying my New Years Eve refreshments?

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TSPking
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Post by TSPking »

This is available already by using the Seasonal TSP Calculator. daily returns were not available prior to 2003, only monthly returns. So to analyze full historical TSP performance back to 1988, you must use monthly returns only. The Seasonal TSP Calculator uses monthly returns in real time to calculate returns and average returns using a predetermined IFT strategy over 20+ years.

Or you are talking about something similar but instead using daily returns for current or recent previous years only?
TSPking

It's a gift...and a curse ~ Adrian Monk

beafet
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Post by beafet »

Interesting...I will be watching this one for sure. I wonder how long it will hold out. :shock:

Would this calculator allow me to choose a monthly allocation for a previous year, but different allocations every year? For example, May 2001 I choose 50% S, 50% C. In May 2002, I put 100% into I. Does that make sense? The way I am looking at it, this calculator only works if every month, from year to year, you use the same allocations...which is the way this particular method works. Am I right?

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TSPking
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Post by TSPking »

No, this is a purely seasonal calculator which is designed to evaluate a predetermined allocation model over time. What you are asking for is what crondanet5 suggested.

I will build a calculator like what you want soon soon.
TSPking

It's a gift...and a curse ~ Adrian Monk

beafet
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Post by beafet »

Awesome!

beafet
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Post by beafet »

It looks to me that if you choose the S fund in January, your overall average would be slightly higher. However, you would see a little more volatility.

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TSPking
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Post by TSPking »

That may be, there are many combinations. My friend that came up with this pattern chose caution over volatility. He had numerous other patterns but we both thought this was the best one, all things considered.

He did have another idea which I couldn't figure out how to capture with the calculator so I left it out. That is, in October go 100% S only if the 50 and 200 day moving averages support a strong market. Otherwise, go 100% G. Doing this resulted in no losing years at all and a higher return.
TSPking

It's a gift...and a curse ~ Adrian Monk

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Peaceful-B
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Post by Peaceful-B »

Looks interesting. Thanks for posting. :)
Disclaimer.Not a registered investment advisor. Does not provide any individualized advice. Past performance is not necessarily indicative of future results.Future accuracy and profitable results cannot be guaranteed.©2009-2010 Peaceful Gains,LLC.

jackyl33
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Post by jackyl33 »

I'm sold, I hope this works :wink:

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wwwtractor
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Models

Post by wwwtractor »

As they always say, "Past performance is no guarantee of future profits."
Retired 2017:C=60%, S=20% and I=20%
Time is the only non-renewable resource.
Knowledge is the only sustainable competitive advantage.
https://share.robinhood.com/cliffow Buy free
https://r.mtf.io/FJvrJ Motif - Make ETFs
https://del.icio.us/wwwtractor/tsp

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TSPking
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Post by TSPking »

wwwtractor,

I couldn't agree more. We'll see how this seasonal approach handles 2010...
TSPking

It's a gift...and a curse ~ Adrian Monk

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chief04010
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Seasonal

Post by chief04010 »

With 7 participants going 100% into the F fund on the 1st trading day of the year, I would say that some people took your research to heart. I may try it myself once I think the market is done going up.

RangerDave
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Chief's thought.

Post by RangerDave »

I felt the same, in looking at this strategy. As closely as we watch the markets, I believe, individually, we can make monthly adjustments based on the directions of the markets each month. Just as Chief said above, when the current leg of this bull market is over (?), use this strategy and make your IFT into it at that time. Watching the F-Fund yesterday, I wish I had followed the strategy! F gave back some today though.
This is a great thing for all of us, to remind us of seasonal trends, and to use to up our gains. For those who do not want to spend the time watching markets, this is a great strategy to follow, thanx King. I'm learning at this site every day!

RangerDave
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Additional thought

Post by RangerDave »

I have a young Ranger in my office, just getting started. I ran him through this strategy. I advised him that if he maxed out his contributions for the first six years, he would have his $100,000.00 base. On his seventh year he could lower his contribution to only 5%, live his life and ride the wave, following this seasonal strategy. At 57 he would retire, potentially, a multi-millionare! The thought blows me away! It did him too.

Post Reply

Fund Prices2022-08-18

FundPriceDayYTD
G $17.00 0.01% 1.56%
F $19.04 0.12% -8.83%
C $65.31 0.24% -9.23%
S $70.24 0.46% -15.82%
I $33.59 -0.29% -14.83%
L2065 $13.10 0.09% -11.96%
L2060 $13.10 0.09% -11.95%
L2055 $13.11 0.09% -11.94%
L2050 $26.96 0.08% -10.22%
L2045 $12.37 0.08% -9.53%
L2040 $45.43 0.07% -8.77%
L2035 $12.08 0.07% -7.94%
L2030 $40.50 0.06% -7.05%
L2025 $11.67 0.05% -4.74%
Linc $23.00 0.03% -2.07%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".