Recovered?

[ProduceMan]

Happy New Year!

How is everyone doing with the COVID loss?

I’m totally recovered as a whole, but I’m still fighting to regain my S Fund losses.

[Bubba]

Happy New Year!

How is everyone doing with the COVID loss?

I’m totally recovered as a whole, but I’m still fighting to regain my S Fund losses.

Funny you mention this. I just recovered this a couple of weeks ago and added a tidbit extra since then. I've decided to stick with strategies that have low SDs and backtested them thoroughly before implementing. I think the ability to sleep well at night is more important than looking at the market every few minutes.

I'm also going to play with the MFW. I'm playing with a small number, but if my strategy works (backtested to '98) then it might prove interesting over the longer term. We'll see.

[mrwawa]

What is the MFW?

[ProduceMan]

What is the MFW?

Mutual Fund Window (TSP’s)

[bloobs]

I just recovered this a couple of weeks ago and added a tidbit extra since then. I've decided to stick with strategies that have low SDs and backtested them thoroughly before implementing.

My own anecdote to add is that I was actually following a very low SD strategy in 2022 that resulted in my only seasonal loss so far whilst so many other higher SD strats did relatively awesome (meaning those had a positive annual return) . That experience served as a reminder to me of the of the nature of statistics; it's only as good until it ISN'T--whether there was a year or 100 years of solid back-tested data behind it.

Needless to say my 2022 strat's SD now is nowhere near as low as it was in pre-2022.

[Scarfinger]

I am curious if your loss that year was less than the S&P 500.

I had a 16% loss in 2022 which would take 19% to recover. I made 20% in 2023 so recovery completed.

[jdoma]

I made my 2022 loss of almost 12% back this year and more earning almost 21% using a low SD strategy I started looking into in 2022. What I still need to make up is the unseen loss that inflation has been creating, which is more apparent when you retire and your income drops. I accidentally went with my wife to the grocery store and was shocked how high prices had gone up. But if my strategy holds, that should work it out this year.

[Bubba]

I just recovered this a couple of weeks ago and added a tidbit extra since then. I've decided to stick with strategies that have low SDs and backtested them thoroughly before implementing.

My own anecdote to add is that I was actually following a very low SD strategy in 2022 that resulted in my only seasonal loss so far whilst so many other higher SD strats did relatively awesome (meaning those had a positive annual return) . That experience served as a reminder to me of the of the nature of statistics; it's only as good until it ISN'T--whether there was a year or 100 years of solid back-tested data behind it.

Needless to say my 2022 strat's SD now is nowhere near as low as it was in pre-2022.

What do you consider as low SD? I'm talking between 4 and 8. 8 is really an upper limit. I remain mainly between 4 and 7.4 or so.

[bloobs]

I just recovered this a couple of weeks ago and added a tidbit extra since then. I've decided to stick with strategies that have low SDs and backtested them thoroughly before implementing.

My own anecdote to add is that I was actually following a very low SD strategy in 2022 that resulted in my only seasonal loss so far whilst so many other higher SD strats did relatively awesome (meaning those had a positive annual return) . That experience served as a reminder to me of the of the nature of statistics; it's only as good until it ISN'T--whether there was a year or 100 years of solid back-tested data behind it.

Needless to say my 2022 strat's SD now is nowhere near as low as it was in pre-2022.

What do you consider as low SD? I'm talking between 4 and 8. 8 is really an upper limit. I remain mainly between 4 and 7.4 or so.

Bubba - I was using #148233 for 2022.

• From 2004 to 2021, SD was in the 3's. https://tspcalc.com/seasonal.php?ID=148233&years=04-21

• From 2004 to present (entirely because of post-2021 performance) SD now calculates to over 10. https://tspcalc.com/seasonal.php?ID=148233&years=04-24

[Bubba]

My own anecdote to add is that I was actually following a very low SD strategy in 2022 that resulted in my only seasonal loss so far whilst so many other higher SD strats did relatively awesome (meaning those had a positive annual return) . That experience served as a reminder to me of the of the nature of statistics; it's only as good until it ISN'T--whether there was a year or 100 years of solid back-tested data behind it.

Needless to say my 2022 strat's SD now is nowhere near as low as it was in pre-2022.

What do you consider as low SD? I'm talking between 4 and 8. 8 is really an upper limit. I remain mainly between 4 and 7.4 or so.

Bubba - I was using #148233 for 2022.

• From 2004 to 2021, SD was in the 3's. https://tspcalc.com/seasonal.php?ID=148233&years=04-21

• From 2004 to present (entirely because of post-2021 performance) SD now calculates to over 10. https://tspcalc.com/seasonal.php?ID=148233&years=04-24

Ouch, that's an excellent word of caution! I've been looking at following a mixture of 4 to 7 SDs, but it's good to keep this in mind. Things can always change. Thanks for the post.

[jdoma]

I consider 4-6 as low and I have been following 169608, which was positive for 2022 and has a SD of 4.36 and a CAGR of 25.23(as of 12/31/23). This strategy is similar to others I also watch but uses G instead of F mostly, which seems to make a difference, positively.

[jimcasada]

What "COVID loss?"

[Bubba]

What do you consider as low SD? I'm talking between 4 and 8. 8 is really an upper limit. I remain mainly between 4 and 7.4 or so.

Bubba - I was using #148233 for 2022.

• From 2004 to 2021, SD was in the 3's. https://tspcalc.com/seasonal.php?ID=148233&years=04-21

• From 2004 to present (entirely because of post-2021 performance) SD now calculates to over 10. https://tspcalc.com/seasonal.php?ID=148233&years=04-24

Ouch, that's an excellent word of caution! I've been looking at following a mixture of 4 to 7 SDs, but it's good to keep this in mind. Things can always change. Thanks for the post.

I'm still thinking about this quite a bit. That low of an SD would mean that 2022 should have been just fine. Having said that, the 2 things I see lacking in that strategy was the mid-terms where (especially) August and September are simply the worst months of all 4 presidential years of investing. Having said that, if you select a strategy, how are you supposed to know that? Also, strategies are supposed to take the guessing out of the whole game...so what I'm saying is I totally understand you.

What I've been doing is following a strategy that is around 7.3 SD overall with a lower SD (I think around 4 or 5) for election years for this year. I also take a look at the expected seasonality for an election year (with a president running for reelection) and consider that within my mix. Nothing is guaranteed in life, but the mixture of this stuff (I hope) will be useful.

Having said that, the TSP doesn't make things easier for us with not giving index information going back to the 80s or 90s. I can get the daily index data going back to the late 80s for the SPX and EFA (EAFE index) or that for AGG (using VBMFX), but DWCPF is the real hold up. I was able to find daily rates for the parent index of DWCPF and could only find this website https://www.cnbc.com/quotes/.DWCPF which gives the values going back to the 80s...but not downloadable data. My point is with more data points and more years (especially the 2000 to 2003 period), one could construct an even better strategy. Oh well.

[bloobs]

That low of an SD would mean that 2022 should have been just fine.

Not really. SD (standard deviation) simply measures the "spread" of data point values over a date range that has already happened. A calculated SD does not forecast any future period's SD--even though it can be inferred. I (re)learned that lesson the hard way in 2022 when i picked #148233 as my base strategy for my TSP specifically for its low SD.

The worse part was that I assumed......, no I BELIEVED, that this strategy with 17 years worth of immutable data showing an SD of 3.4 percentage points wouldn't stray far beyond its annual 26.7 +/- 3.4% performance range (26% is its CAGR and 3.4% is its SD.)

Guess what? It promptly hammered home a grisly double-digit loss in 2022. I also ignored the fact that it had returned a "measly" 15% in 2021.

My overall takeaway is that while diligently using a scientific risk management approach by using seasonal investing's quantifiable measures is a lot better than going with your gut (or worse, believing the loudest talking head on TV)--it is not foolproof and certainly not guaranteed.

I remind myself what seasonal investing just is: it is the analysis of historical market data to detect REPEATIBLE (and henceforth probably "predictable") price action patterns. It ignores price action-based trends, technical analysis, and economic/corporate events analysis, and also thankfully, Jim Cramer.

[PhilJohn]

I rode the losses all the way to the bottom in 2022. Hindsight.

2022 -27
2023 28

I would think I have a way to go. I rode the losses all the way to the bottom in 2022. Hindsight. The one good thing about stickling to one of these plans is it should prevent what I experienced.