Easy and simple strategy

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Bubba
Posts: 404
Joined: Thu Mar 05, 2020 3:40 am

Easy and simple strategy

Post by Bubba »

So, I don't use this, but someone mentioned it the other day and I thought it was interesting to look at it a bit more:

https://www.newtraderu.com/2020/08/13/a ... -and-hold/

and

https://www.newtraderu.com/2022/10/19/s ... -and-hold/

I couldn't find the CAGR for this strategy, but it does better than buy-and-hold. I'm curious to anyone's experience with this and other resources for this strategy.

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Aitrus
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Re: Easy and simple strategy

Post by Aitrus »

I've done this kind of strategy with my Seasonal Musings work. In the thread, I have three Mixes that use either the 200 SMA or EMA in a couple of ways. They're called Jahbulon's SMA Mix, Jahbulon's SMA Enter Only Mix, and Skiehawk's EMA Mix.

Jahbulon's SMA Mix uses the 200 SMA as a stop-loss (basically, bail out to G if the price falls below the 200 SMA for a second day in a row), and don't enter into a non-G Fund in the new month unless the price is above the 200 SMA.

The SMA Enter Only Mix just uses the 200 SMA when deciding to move into a new Fund or stay in the old Fund if the next month has the Mix staying in the same Fund for the next month.

Skiehawk's EMA Mix uses the EMA for entry and exit just like the SMA Enter Only Mix.

In short, the returns for all three are kind of "meh" and lower than regular Jahbulon's Mix. Yes, the returns are "better" than buy-and-hold, but only technically so. It's nothing to write home about.

Here's the thread: https://tspcenter.com/forums/viewtopic.php?f=14&t=19005
Jahbulon’s SMA Mix (same monthly rotation as Old Basic Mix, but uses a technical indicator as a stop-loss mechanism)
Since 1988: CAGR 12.93%, PNR 94% (32 of 34)
Last 20 years: CAGR 10.68%, PNR 95%
Last 10 years: CAGR 11.67%, PNR 90%
Last 5 years: CAGR 12.57%, PNR 80%

Jahbulon’s SMA Enter Only Mix (same as Jahbulon’s SMA Mix, but uses the technical indicator in a slightly different way)
Since 1988: CAGR 13.66%, PNR 91% (31 of 34)
Last 20 years: CAGR 11.88%, PNR 95%
Last 10 years: CAGR 13.34%, PNR 90%
Last 5 years: CAGR 13.04%, PNR 80%
Skiehawk’s EMA Mix
This Mix uses a technical indicator as a stop-loss mechanism to move funds to the G Fund if the indicator triggers a move at the beginning of the month, similar to Jahbulon’s SMA Mix. I won’t be posting about this except for the End-of-Year Round-up.

Jan: C Fund
Feb: C Fund
Mar: C Fund
Apr: C Fund
May: C Fund
Jun: C Fund
Jul: C Fund
Aug: F Fund
Sep: C Fund
Oct: F Fund
Nov: C Fund
Dec: C Fund

Since 1988: CAGR 10.16%, PNR 79% (27 of 34)
Last 20 years: CAGR 6.42%, PNR 80%
Last 10 years: CAGR 10.32%, PNR 90%
Last 5 years: CAGR 8.98%, PNR 80%
These are pulled from post #s 9 and 17 for the stats as they were at the beginning of 2022. I haven't done my end-of-year Round-Up yet - a lot on my plate right now, and I'm way behid on my Musings work.
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com

Bubba
Posts: 404
Joined: Thu Mar 05, 2020 3:40 am

Re: Easy and simple strategy

Post by Bubba »

Aitrus wrote: Mon Jan 30, 2023 11:35 am I've done this kind of strategy with my Seasonal Musings work. In the thread, I have three Mixes that use either the 200 SMA or EMA in a couple of ways. They're called Jahbulon's SMA Mix, Jahbulon's SMA Enter Only Mix, and Skiehawk's EMA Mix.

Jahbulon's SMA Mix uses the 200 SMA as a stop-loss (basically, bail out to G if the price falls below the 200 SMA for a second day in a row), and don't enter into a non-G Fund in the new month unless the price is above the 200 SMA.

The SMA Enter Only Mix just uses the 200 SMA when deciding to move into a new Fund or stay in the old Fund if the next month has the Mix staying in the same Fund for the next month.

Skiehawk's EMA Mix uses the EMA for entry and exit just like the SMA Enter Only Mix.

In short, the returns for all three are kind of "meh" and lower than regular Jahbulon's Mix. Yes, the returns are "better" than buy-and-hold, but only technically so. It's nothing to write home about.

Here's the thread: https://tspcenter.com/forums/viewtopic.php?f=14&t=19005
Jahbulon’s SMA Mix (same monthly rotation as Old Basic Mix, but uses a technical indicator as a stop-loss mechanism)
Since 1988: CAGR 12.93%, PNR 94% (32 of 34)
Last 20 years: CAGR 10.68%, PNR 95%
Last 10 years: CAGR 11.67%, PNR 90%
Last 5 years: CAGR 12.57%, PNR 80%

Jahbulon’s SMA Enter Only Mix (same as Jahbulon’s SMA Mix, but uses the technical indicator in a slightly different way)
Since 1988: CAGR 13.66%, PNR 91% (31 of 34)
Last 20 years: CAGR 11.88%, PNR 95%
Last 10 years: CAGR 13.34%, PNR 90%
Last 5 years: CAGR 13.04%, PNR 80%
Skiehawk’s EMA Mix
This Mix uses a technical indicator as a stop-loss mechanism to move funds to the G Fund if the indicator triggers a move at the beginning of the month, similar to Jahbulon’s SMA Mix. I won’t be posting about this except for the End-of-Year Round-up.

Jan: C Fund
Feb: C Fund
Mar: C Fund
Apr: C Fund
May: C Fund
Jun: C Fund
Jul: C Fund
Aug: F Fund
Sep: C Fund
Oct: F Fund
Nov: C Fund
Dec: C Fund

Since 1988: CAGR 10.16%, PNR 79% (27 of 34)
Last 20 years: CAGR 6.42%, PNR 80%
Last 10 years: CAGR 10.32%, PNR 90%
Last 5 years: CAGR 8.98%, PNR 80%
These are pulled from post #s 9 and 17 for the stats as they were at the beginning of 2022. I haven't done my end-of-year Round-Up yet - a lot on my plate right now, and I'm way behid on my Musings work.
Thanks so much! I had been curious to how this would perform with the TSP. Interestingly enough, Jahbulon's SMA doesn't seem bad, but a lot of work. I wouldn't like doing that daily.

Another strategy is to daily check XLP vs. XLY. If XLP overtakes XLY go to G and if XLY overtakes XLP then stay in stocks. I've read that people do really well with that strategy, but again (a) it's time consuming and (b) it could require multiple moves during a month in our TSP.

Thanks!

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Aitrus
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Re: Easy and simple strategy

Post by Aitrus »

No problem.

I tried following the SMA version in 2014, and lost out bit more than I was comfortable with. It's because the 20 S0MA is a trailing indicator. The price will sometimes drop below it for a day or two and then bounce back up again, but you've already IFTd out to G. The reverse can happen as well - in a down market the SMA can serve as an overhead hurdle that the price bounces off of, causing an investor to buy back in just before the market takes another leg down.

Other times the price plummets through the 200 SMA too quickly to move out, and by then you've lost too much.

On average during a bull market, the 200 SMA is far below the normal price. To reach it you have to suffer through a fair amount of loss before the indicator is triggered.

For somebody who is an adamant buy-and-holder but wants an indicator to notify of big market turndowns, it can work, but there's risk of head-fakes and false indicators to buy back in.

I suck at reading these signals correctly, which is why I stopped using technicals completely after 2014.
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com

Bubba
Posts: 404
Joined: Thu Mar 05, 2020 3:40 am

Re: Easy and simple strategy

Post by Bubba »

For what it's worth, yesterday marked a moment above the 200 MA making this next month a "remain in market" moment. It's another positive signal.

daemon
Posts: 56
Joined: Sat Oct 31, 2020 8:26 pm

Re: Easy and simple strategy

Post by daemon »

Still watching this. Getting close on a buy signal. But Powell will probably crush it this afternoon. lol

https://schrts.co/wDzvRByQ
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When the water runs deep my little dog frolics. When shallow, she drinks

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12squared
Posts: 675
Joined: Thu Dec 31, 2015 7:28 am

Re: Easy and simple strategy

Post by 12squared »

daemon wrote: Wed Feb 01, 2023 11:14 am Still watching this. Getting close on a buy signal. But Powell will probably crush it this afternoon. lol

https://schrts.co/wDzvRByQ
https://schrts.co/FQZhwEwD
50 EMA/SMA looks to a be a few weeks late. Have you considered a 20 day version?
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jatelle
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Re: Easy and simple strategy

Post by jatelle »

The 50 MA bull cross (50 EMA over 50 SMA) is a lagging indicator but it does provide a low risk entry for a 1-2 week rise in price. You can anticipate the cross 2-3 weeks earlier but it is a riskier entry and it can fake you out and not cross. And this is where the SPY is today on the cusp of a cross. Will it cross or be a fake out?

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