If you had to do it all over again?

[bloobs]

Bloob's Holiday PSA:

Knowing what we know NOW, how could we have played 2022 with seasonal strategies:

https://tspcalc.com/seasonal.php?ID=172563#

I look forward to hearing your objective thoughts and insights.

PS - thanks again MJ for your tool

[12squared]

I would ask for TSPcalc to be able to filter by minimum annual return. That is, I'm not so much concerned about the variation from year to year as about not having a negative year.

[bloobs]

I would ask for TSPcalc to be able to filter by minimum annual return. That is, I'm not so much concerned about the variation from year to year as about not having a negative year.

I also used to think that my ideal strat. would be ones with the 18-year long high(er) mean and low stddev, plus without an empirical negative return year...until my ideal strat. started crapping out for 2 years straight now.

My lesson, which is a core tenet of both Investing Basics and Probability 101 is "past results do not guarantee future performance" or "just cuz the Quarter came up heads 14 times in a row doesn't mean it'll keep doing it"--respectively.

My hypothesis is that the strats that have worked well in the neutral and negative interest rate market environment of the past 14 years DO NOT APPEAR TO APPLY anymore to seasonal strategies.

Besides QT, there are market fundamentals and many other nuances (perhaps AI algorithms in effect) that are affecting the market's trading patterns and overall paradigm...

so, I am on the hunt for a new (or hybrid of one that performed great 2020-2022 and one that did well 2004-2019) seasonal strategy.

Any ideas and thoughts?

[IRQVET]

Hindsight 20/20, as soon as Biden took office, I should have hid out in the G-Fund . . .

[Bubba]

I would ask for TSPcalc to be able to filter by minimum annual return. That is, I'm not so much concerned about the variation from year to year as about not having a negative year.

I also used to think that my ideal strat. would be ones with the 18-year long high(er) mean and low stddev, plus without an empirical negative return year...until my ideal strat. started crapping out for 2 years straight now.

My lesson, which is a core tenet of both Investing Basics and Probability 101 is "past results do not guarantee future performance" or "just cuz the Quarter came up heads 14 times in a row doesn't mean it'll keep doing it"--respectively.

My hypothesis is that the strats that have worked well in the neutral and negative interest rate market environment of the past 14 years DO NOT APPEAR TO APPLY anymore to seasonal strategies.

Besides QT, there are market fundamentals and many other nuances (perhaps AI algorithms in effect) that are affecting the market's trading patterns and overall paradigm...

so, I am on the hunt for a new (or hybrid of one that performed great 2020-2022 and one that did well 2004-2019) seasonal strategy.

Any ideas and thoughts?

My chosen strategy is up by almost 10% this year, but still it's not the usual 20 to 50% I was hoping. Nothing to complain about (e.g. I could be in the S and down over 26%!). Having said that, there are a few strategies that actually do make sense with very low SDs and great returns. I would suggest checking 170119 and 169608. Both have great returns, including this year. I'm thinking of going that direction as I'm a bit on the "tired" side of trying to predict the future.

Thanks!

P.S. Note that neither strategy is my chosen one for 2023. I have one that I've worked on as a "current plan" but I'll review it at the end of January. Good luck to all!

Bubba

[Bubba]

Hindsight 20/20, as soon as Biden took office, I should have hid out in the G-Fund . . .

I blame him for everything too. Right now, I blame him for inflation. Thankfully no other country in the world has any problem with inflation, just like in the added chart.

[Bubba]

Hindsight 20/20, as soon as Biden took office, I should have hid out in the G-Fund . . .

I blame him for everything too. Right now, I blame him for inflation. Thankfully no other country in the world has any problem with inflation, just see the added chart.

[Tomanyiron]

Thankfully no other country in the world has any problem with inflation, just like in the added chart.

That's nothing to brag about. We shouldn't have let the rest of the world lead us into this mess.

[bloobs]

Thankfully no other country in the world has any problem with inflation, just like in the added chart.

That's nothing to brag about. We shouldn't have let the rest of the world lead us into this mess.

How?

[Aitrus]

I'm down a bit on the year, but noting that makes me worry overly much.

Here's something I wrote to another member, and I think it's applicable here:
_________________________________________________________________

From my read, 2022 is abnormal due to a combination of three things:

1) The Fed. They're raising rates very fast and for longer than people thought they would (with no signs of slowing down anytime soon). Most people thought they would raise rates to around 1 or 2% and then stop, but the Fed didn't. This action is rendering older bonds worth far less than their purchasers originally thought, and nobody can get rid of them on the market. That means a bad year for the F Fund. In the meantime, the G Fund is going up because it's composed of short-term bond rates, which means that the turnaround into higher earnings happens faster in G than in F, which means that the G Fund is earning more now than it has since the mid 2000s.

2) The Economy. The country is in a recession, and the powers that be are denying it - thus making people believe that the recession will last longer. A lot of people are either a) buying stocks at a discount; b) shorting like crazy; or c) sitting on the sidelines in money markets and CDs for a while. This causes not only the stock market, but the bond market to perform badly - which is what we've seen all year. People don't trust the government or the stock market right now.

3) The Demographics. This is probably the biggest one, but nobody's talking about it. Over 70% of Baby Boomers are now retired or are preparing for it in the next year or so. That means less money going into the market in the form of cheap capital. Cheap capital is what allows companies to expand and grow easily without increasing prices on customers or making product quantity vs quality decisions. The economic boom from the mid-80s to the late 2010s was built on the backs of Boomers shoveling ever larger amounts of their paychecks into 401ks and investments, creating a capital-rich environment. Now that trend has stopped, and is starting to reverse with greater speed. With cheap capital drying up, companies have to cut back, aren't issuing as many bonds, and forecasts are growing grim. The economy is trying to figure out how to expand / maintain equilibrium without having the easy access to capital that it once did - and deal with the breakdown of global supply chains at the same time.

The next time we'll see cheap capital like we once did is when the Millennials start doing it in about 20 years. Gen-X doesn't have the population numbers to make up for what the Boomer retirement is taking out of the labor force. Gen-Xers were bottlenecked all their careers by the Boomers, so their expected earnings rates at this point in their lives is about 25% less than what the Boomers had at this point in theirs. And there's far fewer Gen-Xers to fill the available gaps being left behind by the Boomers, so the spots are getting filled by the Millennials instead, most of whom don't invest nearly as much as the Boomers did when they occupied those positions. When you're young you put very little away for retirement because you're paying down the house, paying off the car, spending on the kids, etc. When you're old you try to shove every dime you can into your retirement. The new Millennial hires are still young enough that they're still spending more than saving, but the paychecks they're receiving were previously earned by people who were throwing every spare cent into retirement. Millennials have kept us out of a couple of minor recessions since 2008 by pure consumer spending power, but that kind of spending is always temporary for a company's bottom line because, while it pays today's bills, it doesn't allow for growth. This is because the profit margin is usually too low to do more than maintain the status quo. It takes extra capital from investors to allow a company to expand. Lacking that capital, a company has to either raise prices, lower overhead (layoffs and cutbacks in pay/benefits), or reduce product quality in order to raise the funds necessary for expansion.

[Tomanyiron]

Thankfully no other country in the world has any problem with inflation, just like in the added chart.

That's nothing to brag about. We shouldn't have let the rest of the world lead us into this mess.

How?

We saw it coming, but were in denial.
"The White House has repeated the misleading claim that inflation is no worse than the rest of the world, and merely part of a global trend. Experts at the San Francisco Fed write: “…Since the first half of 2021, U.S. inflation has increasingly outpaced inflation in other developed countries. Estimates suggest that fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence.”
According to the Pew Research Center in November, prices in the United States have been rising more quickly than almost anywhere else."

Even Mark Zandi, the White House’s preferred economic forecaster, says the Build Back Better bill worsen inflation:
“None of these ideas so far will help to a meaningful degree, and could do some harm because they could juice up demand at a time supply is constrained by the pandemic and worsen inflation.”

Despite the end of the pandemic, the Biden Administration continued to send monthly “stimulus” checks and unemployment bonuses, which increased inflation by about 3 percentage points by the fourth quarter of 2021.
Former Obama-Biden economic adviser Larry Summers himself warned that President Biden’s so-called “stimulus” would trigger inflation.

[bloobs]

That's nothing to brag about. We shouldn't have let the rest of the world lead us into this mess.

How?

We saw it coming, but were in denial.
...
Former Obama-Biden economic adviser Larry Summers himself warned that President Biden’s so-called “stimulus” would trigger inflation.

Plausible....but this hypothesis (data-driven and non-partisan tainted) is the most likely cause (as always has been for decades):

https://tradingeconomics.com/united-sta ... of%201951.

[Tomanyiron]

We could've lessen the impact, but we made it worse.

[paul]

I will answer from a "buy and hold" POV: In 1985 I would go all stocks. Maintain 75% C, 25% S until I was about 10 years from retirement, re-balancing annually to quarterly. At that 10 year mark do a retirement estimate, evaluate, and re-allocate accordingly.

[12squared]

My chosen strategy is up by almost 10% this year, but still it's not the usual 20 to 50% I was hoping. Nothing to complain about (e.g. I could be in the S and down over 26%!). Having said that, there are a few strategies that actually do make sense with very low SDs and great returns. I would suggest checking 170119 and 169608. Both have great returns, including this year. I'm thinking of going that direction as I'm a bit on the "tired" side of trying to predict the future.

Both have great returns, but some of their success was due to hindsight.
169608 was +4.17% YTD when it was created 2022-06-16. As of 16 Dec it is +12.66%, or up more than 8% since creation.
170119 was +15.88% YTD when it was created 2022-06-16. As of 16 Dec it is +11.12%, or down ~4.5% since creation.
https://tspcalc.com/seasonal.php?ID=169 ... rks=170119

TSPcalc 169608 & 170119 YTD 16Dec22.png

Here are a few created before 1 Jan 2022 which are still positive as of 16 Dec 22. All (except #24) had positive returns from 2004-21, most of which were in the double digits. All but one took a hit in the past few days.
https://tspcalc.com/seasonal.php?ID=24& ... 225-153763