Seasonal Musings 2020

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Aitrus
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Re: Seasonal Musings 2020

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Seasonal Strategy Results for December 2020 and End-Of-Year Round-Up

This entry will wrap up the results for 2020, including giving updated historical figures for various timeframes as they apply to the Fund or Mix in question. Please note that my figures may differ slightly (0.03% or less) from the TSP’s announced figures due to tracking error.

Note: A "good" month for F Fund is CAGR 0.5% or better, and PNR 70% or better. A "good" month for C, S and I Funds is CAGR 1% or better, and PNR 70% or better. See 2nd post in the thread for description of CAGR. PNR is the ratio of Positive Months to Negative Months.

General Funds
G Fund: 0.07%, 0.98% for the year, PNR remains 100%
Dec Since 1988: CAGR = 0.39%
Dec Last 20 years: CAGR = 0.26%
Dec Last 10 years: CAGR = 0.17%
Dec Last 5 years: CAGR = 0.18%

Total annual G Fund returns:
Since 1988: CAGR 4.74%
Last 20 years: CAGR 3.15%
Last 10 years: CAGR 2.05%
Last 5 years: CAGR 2.06%
2019’s return: 2.23%

2020 was the by far the worst year for the G Fund – EVER! The next worst years were 2012 at 1.48%, 2016 at 1.84%, and 2013 at 1.90%. As if 2020 didn’t have enough negatives going for it, anybody who ran for the G Fund for safety in Feb or March would have been mightily disappointed by the returns they got for the rest of the year. Retirees who keep their money safe and earning a modest amount of return (albeit shy of inflation) would have seen their accounts essentially flatlined for the year.

F Fund: 0.14%, 7.51% for the year.
Dec Since 1988: CAGR = 0.56%, PNR 70%
Dec Last 20 years: CAGR = 0.39%, PNR 60%
Dec Last 10 years: CAGR = 0.27%, PNR 60%
Dec Last 5 years: CAGR = 0.51%, PNR 80%

Total annual F Fund returns:
Since 1988: CAGR 6.16%, PNR 91%
Last 20 years: CAGR 4.98%, PNR 95%
Last 10 years: CAGR 4.07%, PNR 90%
Last 5 years: CAGR 4.57%, PNR 100%
2019’s return: 8.68%

Despite having a basically flatline December, the F Fund had a solid year in 2020. Anybody who got out of the market in Feb or Mar and stayed in the F Fund would have seen much nicer returns than if they were in the G Fund.

C Fund: 3.84%, 18.31% for the year.
Dec Since 1988: CAGR = 1.57%, PNR 82%
Dec Last 20 years: CAGR = 0.83%, PNR 75%
Dec Last 10 years: CAGR = 0.30%, PNR 70%
Dec Last 5 years: CAGR = 0.07%, PNR 80%

Total annual C Fund returns:
Since 1988: CAGR 10.85%, PNR 82%
Last 20 years: CAGR 7.48%, PNR 80%
Last 10 years: CAGR 13.91%, PNR 90%
Last 5 years: CAGR 15.20%, PNR 80%
2019’s return: 31.45%

This December was a solid one for the C Fund. While the C Fund took a hard hit in Feb and Mar, it had largely recovered by July, and the rest of the year performed well. One surprise was August, which had a 7.19% return, which is a record high for that time of year. April and November also saw new record highs of 12.81% and 10.95% respectively.

S Fund: 7.24%, 31.85% for the year.
Dec Since 1988: CAGR = 2.58%, PNR 85%
Dec Last 20 years: CAGR = 1.39%, PNR 75%
Dec Last 10 years: CAGR = 0.26%, PNR 70%
Dec Last 5 years: CAGR = 0.01%, PNR 80%

Total annual S Fund returns:
Since 1988: CAGR 11.88%, PNR 73%
Last 20 years: CAGR 9.67%, PNR 70%
Last 10 years: CAGR 13.32%, PNR 70%
Last 5 years: 16.06%, PNR 80%
2019’s return: 27.98%

The S Fund had the fourth best December in its history this year. Combine that with the best ever return for the Fund in November (18.26%) and you have the highest two months in the history of the S Fund. A very nice finish to the year. Also this year: the second-best pair of months in the history of the F Fund: Apr / May with 15.81% and 8.79%. Combined with the crash in Feb / Mar, and the year’s results are good enough for seventh-best in the S Fund’s history.

I Fund: 4.64%, 8.16% YTD
Dec Since 1988: CAGR = 2.22%, PNR 79%
Dec Last 20 years: CAGR = 1.80%, PNR 70%
Dec Last 10 years: CAGR = 0.49%, PNR 60%
Dec Last 5 years: CAGR = 1.56%, PNR 80%

Total annual I Fund returns:
Since 1988: CAGR 5.32%, PNR 70%
Last 20 years: CAGR 4.65%, PNR 65%
Last 10 years: CAGR 5.87%, PNR 60%
Last 5 years: CAGR 7.99%, PNR 80%
2019’s return: 22.46%

This December was solidly above average for the I Fund, resulting in a nice Nov / Dec finish to an otherwise mediocre year for the I Fund. The I Fund didn’t really recover from the Feb / Mar crash like the rest of the market did, and spent most of the year languishing in the red zone.

Currently Tracked Seasonal Strategies
Jahbulon's Basic Mix: S Fund in Dec (7.24%), 18.49% for the year
gclapper’s M3 Mix: S Fund in Dec (7.24%), 8.27% for the year
TSPCenter.com's Default Setting: S Fund in Dec (7.24%), 26.76% for the year
tmj100’s Mix: S Fund in Dec (7.24%), 6.63% for the year
Boltman's Mix: I Fund in Dec (4.64%), 26.39% for the year
Chindsey’s #1 Mix: S Fund in Dec (7.24%), 2.60% for the year
Sell in May and Go Away: C Fund in Dec (3.84%), 1.95% for the year
G all year, S in Dec Mix: S Fund in Dec (7.24%), 8.21% for the year

The benchmark Sell in May and Go Away won last year with the second best return in its history, but a repeat performance was not to be. This year was it not only the last place, but this was the sixth lowest return on record. The winner this year for the actively traced Mixes is TSPCenter.com’s Default, with Boltman’s Mix within a single day’s trading – statistically a dead heat. The only other Mix to get into double digits was Jahbulon’s Basic Mix, but everybody was in positive territory. Out of all the Mixes I track, there was only one that performed better than TSPCenter, and that one is the C&F Mix. It’s a Mix using only the optimal blend of just the c and F Funds, and it returned 26.99%.

Now here’s the updated stats of how each Mix has performed over the long run, as well as this year’s results for the spin-offs that I also track behind the scenes and don’t include in my regular posts.

Seasonal Mix End-of-Year Round-up

Jahbulon’s Basic Mix: 18.49% for 2020
Since 1988: CAGR 15.63%, PNR 91% (30 of 33 years positive)
Last 20 years: CAGR 11.91%, PNR 90%
Last 10 years: CAGR 13.22%, PNR 90%
Last 5 years: CAGR 10.53%, PNR 80%

Spin-offs:
Jahbulon’s Old Basic Mix (uses the S Fund in Jan instead of F): 15.55%
Jahbulon’s SMA Mix (same monthly rotation as Old Basic Mix, but uses a technical indicator): 11.69%
Jahbulon’s SMA Enter Only Mix (same rotation as Old Basic Mix, but uses the indicator differently): 11.69%
Jahbulon’s Old Mix with F in July (does just what the title says): 11.01%
Aitrus’ Homebrew V1 (Like Jahbulon’s, but uses G Fund in Jun, Aug and Sep instead of F Fund): 15.99%

Gclapper’s M3 Mix:
8.27% for 2020
Since 1988: CAGR 16.25%, PNR 94% (31 of 33 years positive)
Last 20 years: CAGR 12.34%, PNR 90%
Last 10 years: CAGR 13.20%, PNR 90%
Last 5 years: CAGR 8.76%, PNR 80%

Spin-offs:
Rome26’s Mix (Uses C in July): 11.78%
Rothwell’s Mix (Uses S in Mar, May, Nov and C in Sep): 0.97%

TSP Center’s Default Setting: 26.76% for 2020
Since 1988: CAGR 13.40%, PNR 91% (30 of 33 years positive)
Last 20 years: CAGR 10.87%, PNR 90%
Last 10 years: CAGR 8.24%, PNR 80%
Last 5 years: CAGR 9.97%, PNR 60%

Spin-offs: None

tmj100’s Mix: 6.63% for 2020
Since 1988: CAGR 15.26%, PNR 91% (30 of 33 years positive)
Last 20 years: CAGR 13.39%, PNR 85%
Last 10 years: CAGR 14.24%, PNR 90%
Last 5 years: CAGR 10.16%, PNR 80%

Spin-offs:
fede.dica’s Mix (uses I in Jul instead of C): 3.29%

Boltman’s Mix: 26.39% for 2020
Since 1988: CAGR 14.07%, PNR 82% (27 of 33 years positive)
Last 20 years: CAGR 14.48%, PNR 80%
Last 10 years: CAGR 11.52%, PNR 70%
Last 5 years: CAGR 14.35%, PNR 80%

Spin-offs: None

Chindsey’s Mix #1: 2.60% for 2020
Since 1988: CAGR 14.33%, PNR 97% (32 of 33 years positive)
Last 20 years: CAGR 11.43%, PNR 85%
Last 10 years: CAGR 11.29%, PNR 90%
Last 5 years: CAGR 8.60%, PNR 80%

Spin-offs:
Chindsey’s Mix #2 (uses S in May instead of C): 6.55%

Sell in May and Go Away: 1.95% for 2020
Since 1988: CAGR 10.83%, PNR 88% (29 of 33 years positive)
Last 20 years: CAGR 8.34%, PNR 85%
Last 10 years: CAGR 11.41%, PNR 90%
Last 5 years: CAGR 7.23%, PNR 80%

Spin-offs:
Aitrus’ Homebrew V2 (uses S and F Funds in the same pattern): 7.91%
Aitrus’ Homebrew V3 (uses S and G Funds in the same pattern): -3.81%
Aitrus’ Homebrew V4 (uses C and F Funds in the same pattern): 3.42%

G All Year, S in Dec: 8.21% for 2020
Since 1988: CAGR 7.02%, PNR 94% (31 of 33 years positive)
Last 20 years: CAGR 4.31%, PNR 90%
Last 10 years: CAGR 2.14%, PNR 80%
Last 5 years: CAGR 1.89%, PNR 60%

Spin-offs:
F All Year, S in Dec (just what the title says): 15.14%

Others Mixes I’m tracking behind the scenes that aren’t spin-offs from any of the above:

Skiehawk’s EMA Mix (C all year except F in Aug and Oct, uses a technical indicator): 9.91%
C&F (a Mix that uses only C and F when choosing which Fund to be in for the month): 26.99%
S&F (same as above, using only S and F): 18.73%
I&F (same as above, using only I and F): -0.99%

Perfect vs Perfectly Imperfect

The best possible blend would have been as follows:
2020 Perfect Mix:

Jan: F (1.91%)
Feb: F (1.82%)
Mar: G (0.11%)
Apr: S (15.81%)
May: S (8.79%)
Jun: S (4.00%)
Jul: S (5.71%)
Aug: S (7.20%)
Sep: G (0.06%)
Oct: S (0.50%)
Nov: S (18.26%)
Dec: S (7.24%)
Total: 96.71%

The worst possible blend would have been as follows:
2020 Perfectly Imperfect Mix:

Jan: I (-2.73%)
Feb: C (-8.24%)
Mar: S (-21.40%)
Apr: G (0.07%)
May: G (0.06%)
Jun: G (0.06%)
Jul: G (0.06%)
Aug: F (-0.81%)
Sep: C (-3.80%)
Oct: I (-3.97%)
Nov: G (0.07%)
Dec: G (0.07%)
Total: -35.46%

Out the 25 Mixes I track, only 6 beat their buy-and-hold Fund benchmarks for 2020. They were (in order of success):

C&F Mix (Beat the C Fund by 8.68%)
TSPCenter Default Mix (Beat C Fund by 8.45%, but didn’t beat the S Fund)
Boltman’s Mix (Beat the C Fund by 8.07%, but didn’t beat the S Fund)
F All Year, S in Dec (Beat the F Fund by 7.63%)
G All Year, S in Dec (Beat the G Fund by 7.23%)
Jahbulon's Basic Mix (Beat C Fund by 0.18%, but didn’t beat the S Fund)

The worst performers for 2020 were (in order of suckage):

Aitrus’ Homebrew v3 (-3.81%)
I&F (-0.99%)
Rothwell’s Mix (0.97%)
Sell in May and Go Away (1.95%)

Final Thoughts

As pretty much everybody knows, 2020 was a whirlwind year in many ways. COVID fears drove a panic crash, and then a very robust recovery as the word got out of a vaccine in development. Anybody in stocks in Feb and Mar took big hits. Undoubtedly, some saw the writing on the wall and got out early and got back in sometime after the bottom. Others likely tried to tough it out, but couldn’t take it and jumped ship somewhere on the downslope and were afraid to get back in, and so missed the fantastic returns in April and May.

The biggest upswing took place in the S Fund, with April and November being record-setting months. The S Fund 2020 Nov / Dec return saw the best two-month return in the TSP’s history, with Apr / May being the second best – including all the other Funds. Anybody in the S Fund during those four months made a total of 50.10%.

The markets made a hefty profit this year, but no Mix beat the S Fund. It was firing on all cylinders, and didn’t even pause for breath during the normally negative months of June and August (Sep was still a bit negative, however). As a result, no Mix came within arm's reach of the S Fund’s 31.85% return. The closest was a behind-the-scenes Mix that garnered 26.99% - still a hefty return in it's own right, and several others were in the 15+% range.

However, for those whose long-term outlook renders them content with making at least 12% a year as part of a long-term plan, several Mixes achieved this. Jahbulon’s Basic, TSPCenter’s Default, Boltman’s, F all Year, and a few of the non-actively tracked Mixes as well.

Possibly one of the biggest lessons of the year was the maxim of sticking to one’s plan (prior preparedness in other areas of life - such as always having enough toilet paper on hand - could arguably be another lesson as well). In almost all cases, the Mixes recovered any lost ground from Jan – Mar to end up in the black by the end of the year, with a number of them ending up with respectable returns. It’s my understanding that most of the TSPCalc’s more popular Strategies performed in a similar fashion.

I think that seeing the benefit of using a Seasonal Strategy play out in real time was important in navigating 2020. We had a lot of other stuff to deal with this year – a pandemic, lockdowns, telework, closed schools, uncertainty, competing and conflicting news reports, politics galore, cancel culture, and a general sense of unease and foreboding. Many things went wrong in 2020, but some things also went right. Those who managed to stick to a well-formulated Seasonal Strategy – either one of my monthly ones or one from TSPCalc - were able to recover their retirement investment losses by following the plan. By keeping the emotions at bay and relying on the data, they were able to turn a potential “sell at the bottom and stay out of the market due to fear” into a winning year. Yes, those who did so didn’t make as much as they could if they just remained in the S Fund the entire year, but it would have taken incredible fortitude to ride the roller coaster down to the tune of -29.41% in Feb / Mar and stick it out for the rest of the year. Many of us just aren't made of such stern stuff that we can do so without having a plan of some kind to help bolster us during the hard times.

With all that said, I’m optimistic that while 2021 will be another memorable year for a number of reasons, I’m also of the opinion that it won’t be as crazy as 2020 was. Even if much of what happened in 2020 repeats itself in 2021, we will have the benefit of hindsight to tell us that we’ve been through this dance before, we know the steps, and we know how the song plays out – so we should be able to handle it easier the second time around. We have a plan, and that plan has been tested and has proven itself reliable, so we know we'll get through just fine. It’s almost as if we’ve been given a “stress inoculation”…

Thanks to everybody for sticking with me through another year of doing this. As of this date I’m still working on updating the introductory posts for the 2021 Seasonal Musings thread, so stay tuned for those in the coming days.

Until next time, be well.
Seasonal Musings 2021: viewtopic.php?f=14&t=18757
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

User avatar
sconey
Posts: 20
Joined: Fri Feb 28, 2020 1:05 pm

Re: Seasonal Musings 2020

Post by sconey »

Excellent post! Thanks, Aitrus.

C13265
Posts: 1
Joined: Wed Dec 09, 2020 10:56 am

Re: Seasonal Musings 2020

Post by C13265 »

Thanks for all the information! It has been extremely helpful.

Post Reply

Fund Prices2021-05-07

FundPriceDayYTD
G $16.58 0.00% 0.43%
F $20.72 0.00% -2.27%
C $63.32 0.75% 13.24%
S $82.16 1.32% 10.72%
I $38.76 1.29% 9.51%
L2065 $13.84 1.02% 11.49%
L2060 $13.84 1.02% 11.49%
L2055 $13.84 1.02% 11.49%
L2050 $28.21 0.84% 9.30%
L2045 $12.88 0.79% 8.73%
L2040 $47.05 0.73% 8.19%
L2035 $12.44 0.67% 7.54%
L2030 $41.46 0.61% 6.91%
L2025 $11.77 0.48% 5.47%
Linc $22.89 0.23% 2.76%

Pending Allocations

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

What else

"Don't ever half-ass two things. Whole-ass one thing."
- Ron Swanson