bulli$h's Account Talk

[bulli$h]

Has anybody seen any significant market trends based on the day of the week? I recently did a comparison of the past few months of trading and noticed that Friday seems to be the day when the S&P fares the worst. These few months of data might not be statistically significant, but there was a fairly large difference.

If anybody has seen any research on the subject, could you please point me to it? It might help to know this when planning moves in/out of TSP funds.

Thanks!

 

[XL-entLady]

Luv2read PM'ed me recently with a quote from Phillyfed that might be of help. I had known the information in generalities but had never seen it put down so specifically. The quote follows:


"Phillyfed's Account Talk

Here are some cyclical statistics that always need to be in the back of your mind when investing.....

The most profitable months are January, December and November (in that order).

The first trading day of each month is always the best (by a long shot). Over the last nine years the Dow has gained more points on the first trading day of the month than all the other days of the month combined. From September 2, 1997 through June 1, 2006, the Dow gained 3637 points. It is incredible that 4420 points were gained on the first trading days of these 106 months! The remaining 2095 trading days lost 782 points. So much for buy and hold. A single trading day - less than 5% of the total trading days available - produced all the returns

Selling on Fridays can be a mistake - Mondays and Tuesdays are the most bullish days of the week (Buying a severely negative Nasdaq composite at the close on a Friday afternoon, or after the open on Monday, is almost always a winning trade of 2 to 3%).


A bullish time for the Nasdaq is the summer rally that occurs between June 25 and July 20th. August and September are the worst months, except for August 2000 (one of the best on record), and we all know what happened after that. August and September are for vacationing with the family, period. If the mavens of Wall Street know this and turn off their PCs for the sake of the Poconos(Thats were I'm at at) or the Hamptons - why shouldn't we? Statistically you won't miss much while you're gone. Besides - even if there is a little up/down blip while you're away - the market usually brings it right back down after Labor Day to where it was when you left.

In conclusion, next time you're sitting around the dinner table with neighbors and friends and this old saw gets trotted out, "You can't time the market. Just hold for the long term", assure them the nonsense of that statement. It was probably invented by money managers (during the great bull market of the 1990s) to keep customers in line and their monthly fees coming in."
__________________

Lady

 

[bulli$h]

Thanks for the XL-ent information Lady! This helps address my biggest question - how do we really know which day (or month) is a good/bad to transfer funds. Every little edge helps.

 

[Bullitt]

my biggest question - how do we really know which day (or month) is a good/bad to transfer funds.

Bullish, I recommend to you these three books.

1. Random Walk Down Wall Street by Burton Malkiel
2. Fooled by Randomness: The Hidden Role of Chance in Life and the Markets by Nassim Taleb
3. The Drunkard's Walk: How Randomness Rules Our Lives by Leonard Mlodinow

Beware though, after reading these you'll never look at technical analysis or voodoo charts the same ever again. The proof is in the pudding. There is zero correlation between past returns or the amount of IFT's in relation to long term gains. Asset allocation is the key to a long term portfolio.

 

[XL-entLady]

Asset allocation is the key to a long term portfolio.

Bulli$h,

I 110% agree with Bullitt's statement about asset allocation. Everyone has his own investment strategy, but my TSP strategy is to have something in every single fund. It's just the percentages that I manage. And for me it's working very well.

Good luck,
Lady

 

[Birchtree]

My dear Lady, by having something in every single fund yoy are limiting your upside potential - it's the number of shares you own that make the difference when it comes to racking gains.

 

[Asylum]

good anecdotal evidence of this is nsurf9's 18.64% return since 25 Jan this year...

with one exception (a 30-70 C & S split) he's been 100% in either G or I (with a one day jump in the F)...

 

[bulli$h]

Sounds like I need to learn nsurf9's secret for knowing when to move in/out of G and I. I'm sure there's more than luck involved...

 

[luv2read]

Ebb thought he had it figured out last year...

 

[Birchtree]

We'll see how much profit he has left on the table by being in the G fund for the next two weeks - it's not a move I would make but then again I'm not up 18%. So he can afford to take that kind of sacrifice and allow the rest of us peeons to catch up. Ebb, unfortunately was visited by the "Cooler" for a period of time and paid the price for that relationship. Don't ever let the "Cooler" stand next to your action. Where does nsurf9 live, anyway?

 

[bulli$h]

Who are Ebb and the cooler? I have some catching up to do.

 

[Guest2]

Who are Ebb and the cooler? I have some catching up to do.

Ebb is currently a Premium Service offered through the TSPTalk homepage
and was seeing very exciting gains YTD prior to becoming a pay to play
service. When the Bear Market hit Ebb's system, it produced some very
chilling loses. Ebb's system was free to view for quite some time and was
vigorously tested prior to becoming Premium. He's a very big part of me
finding this goldmine of a website and his system is a tool which is missed
by many members of lesser financial means.

 

[luv2read]

Ebb is currently a Premium Service offered through the TSPTalk homepage
and was seeing very exciting gains YTD prior to becoming a pay to play
service. When the Bear Market hit Ebb's system, it produced some very
chilling loses. Ebb's system was free to view for quite some time and was
vigorously tested prior to becoming Premium. He's a very big part of me
finding this goldmine of a website and his system is tool which is missed
by many members of lesser financial means.

IFT rule change played havoc with the "system." In fact, the system played havoc with Barclays and made them look like idiots - until the Bear Market hit.

 

[nasa1974]

IFT rule change played havoc with the "system." In fact, the system played havoc with Barclays and made them look like idiots - until the Bear Market hit.

Are you talking about the 2 IFT's we are under now? I think Barclays is still messing with our money and I disagree that the Bear Market made them stop looking like idiots. The FRTIB bailed them out and punished us for it. For what it is worth, that's my opinion.

 

[bulli$h]

It sounds like the two IFT limit has had a dramatic effect on the TSP Talk society. Does it eliminate any possible "system" investing and destroy the value of pay to play tools?

 

[luv2read]

IFT rule change played havoc with the "system." In fact, the system played havoc with Barclays and made them look like idiots - until the Bear Market hit.

Are you talking about the 2 IFT's we are under now? I think Barclays is still messing with our money and I disagree that the Bear Market made them stop looking like idiots. The FRTIB bailed them out and punished us for it. For what it is worth, that's my opinion.

Yes I'm talking about the new 2 IFT limit. The returns will not be as great using the system which was dependent on daily IFT's.

The Bear Market didn't make Barclays stop looking like idiots....Ebb's system outperformed them - until the Bear Market hit Ebb's system. If I didn't make that clear, I apologize.

 

[luv2read]

It sounds like the two IFT limit has had a dramatic effect on the TSP Talk society. Does it eliminate any possible "system" investing and destroy the value of pay to play tools?

Yes it has. No it doesn't. The tools are adjusting to the limits and new strategies are emerging.

 

[Birchtree]

I blame it on the "Cooler", nothing wrong with the system. 99.9 percent of systems don't wiork anyway.