Happy_Trails
TSP Pro
- Reaction score
- 14
Hello,
I have decided to actively mange my TSP account. I have been a buy & hold investor for many years with a basic asset allocation of 50% stocks and 50% bonds. This is not a bad way to go if you do not care about drawdowns - it will perform well in most markets but gets hammered during protracted bear markets. My goal in switching to an active approach is to substantially decrease drawdowns while maintaining comparable returns to the basic 50/50 buy and hold asset allocation. I am following a very basic strategy based on ideas presented by Mebane Faber in his book "The Ivy Portfolio." Also, there is an article on Fedsmith dated 7/28/10 regarding the approach. In a nutshell, I expect to be in the market so long as the price of C,S,& I are above their 10 month simple moving averages at the beginning of each month. If they are not, I will move all funds to the G fund for that entire month. I will check the simple moving averages at the beginning of the next month and if prices have moved back above the 10 month simple moving averages, I will be back 100% invested in stocks. Very simple and easy to implement even with the two transfers per month limitation. I am also watching the TSPTalk sentiment system very closely.
I have decided to actively mange my TSP account. I have been a buy & hold investor for many years with a basic asset allocation of 50% stocks and 50% bonds. This is not a bad way to go if you do not care about drawdowns - it will perform well in most markets but gets hammered during protracted bear markets. My goal in switching to an active approach is to substantially decrease drawdowns while maintaining comparable returns to the basic 50/50 buy and hold asset allocation. I am following a very basic strategy based on ideas presented by Mebane Faber in his book "The Ivy Portfolio." Also, there is an article on Fedsmith dated 7/28/10 regarding the approach. In a nutshell, I expect to be in the market so long as the price of C,S,& I are above their 10 month simple moving averages at the beginning of each month. If they are not, I will move all funds to the G fund for that entire month. I will check the simple moving averages at the beginning of the next month and if prices have moved back above the 10 month simple moving averages, I will be back 100% invested in stocks. Very simple and easy to implement even with the two transfers per month limitation. I am also watching the TSPTalk sentiment system very closely.
