Last Month's Best Fund Method Strategy

[bfranklin03]

Re: Contribution Allocation Questions

I was asking the question in reference to the Last Month's Best Fund Method, which is why I posted it in that forum. Sorry that my post wasn't very clear. When making an IFT at the beginning of the month as a result of a fund performing better than the one you're currently invested in, do you also change the contribution allocation to allocate 100% (or whatever percentage) into the new fund? Or, does your contribution allocation stay fixed in a certain fund as part of the LMBFM method? I was assuming it would change with the IFT so that deposits for that month would be placed in the fund forecasted to perform the best. Thanks.

 

[tsptalk]

Re: Contribution Allocation Questions

Sorry about that. I don't know if the system specifies it, but I'd say changing both (interfund transfer and contribution allocation) seems reasonable in that situation.

 

[Viva_La_Migra]

Re: Contribution Allocation Questions

I was asking the question in reference to the Last Month's Best Fund Method, which is why I posted it in that forum. Sorry that my post wasn't very clear. When making an IFT at the beginning of the month as a result of a fund performing better than the one you're currently invested in, do you also change the contribution allocation to allocate 100% (or whatever percentage) into the new fund? Or, does your contribution allocation stay fixed in a certain fund as part of the LMBFM method? I was assuming it would change with the IFT so that deposits for that month would be placed in the fund forecasted to perform the best. Thanks.

You can change the contribution allocation when you do an IFT, but you certainly don't have to. In some cases, it might not make sense to do that. If the LMBFM indicates the G fund is the best performing in one month, it might mean it's a good opportunity to buy stock shares since those funds are down.

 

[James48843]

Re: Contribution Allocation Questions

Well, anorther month gone by, and another successful month for the Last Month's Best Fund method.

For August, the "F" fund turned in a nice 1.45% as the best of the funds. Our LMBM missed a fraction off that, as it was moved from G to F on the first day of August and missed some August gain. But it still turned in a nice gain for the month, and we're at 8.03% overall for the year- better than ANY single fund out there. Yes- this method has value this year. F is best right now for August, and we;ll keep a close eye moving forward for the signals that will tell us to move elsewhere soon. Just not quite yet.

So we'll keep the allocation in "F" moving forward. No change for September.


Here is the chart:

 

[Sensei]

Re: Contribution Allocation Questions

...and we;ll keep a close eye moving forward for the signals that will tell us to move elsewhere soon. Just not quite yet.

I haven't read back to the beginning of this thread for the rules of this method. I thought it just stayed in last month's best fund for the entire month, regardless of how that fund is currently performing. Is there a signal that would prompt the system to make an IFT within a month?

I'm seriously considering going with this method long term. I'd like to fully understand it. Thanks!

 

[tsptalk]

Re: Contribution Allocation Questions

I'm not sure what was meant by that except maybe that James is watching for changes at the end of each month, but the bottom line was:

So we'll keep the allocation in "F" moving forward. No change for September.

 

[malyla]

Re: Contribution Allocation Questions

I haven't read back to the beginning of this thread for the rules of this method...... I'd like to fully understand it.

Reading the past post is always a good way to fully understand the methods. No shortcuts can compare to all the work that so many contributed in all those posts.

 

[DakotaKid]

Re: Contribution Allocation Questions

Agreed Malyla. However, if my recollection serves me correctly, this is a pretty basic system. I believe it's looked at monthly, with no changes during the month. So say you are 100% C fund now based on last month. At the end of September, you would look at the returns of each fund for that month. So say for the month of September the returns were: G = +.15%, F = +.45%, C = -2%, S = -4%, and I = - 6%. You would make an IFT to a 100% F fund allocation for October. I believe someone looked at doing it bi-monthly, but the returns didn't appear as good. Hope this helps!

 

[RealMoneyIssues]

Re: Contribution Allocation Questions

I believe someone looked at doing it bi-monthly, but the returns didn't appear as good. Hope this helps!

Bi-Monthly would be similar to the Modified 10 Month SMA Method that Dave is doing (although he is MIA right now). Similar in scope, but the 10-Month M-SMA method only uses LYBF of the equities (currently S) and the F fund.

I update it now and I use it as another tool in my toolbox to gauge direction...

http://www.tsptalk.com/mb/showthrea...dified-SMA-Method-(M-SMA)&p=331594#post331594

 

[James48843]

Last month best fund method

September came, and September went. And once again, the "F" fund was the best place to be last month.

Overall, the F fund gained 0.73% for the month. So once again, we REMAIN FULLY INVESTED ONLY IN THE "F" FUND moving into October. See you around Halloween, and let's see if we stay this way much longer.

September's results:

 

[James48843]

Re: Last month best fund method

OK- we finally got a change here. Last month, the "S" fund was, by far, the best fund. So....we'll initiate an interfund transfer from the "F" fund into the "S" fund. We'll make the change tonight, to become effective at the close of business tomorrow.

Moving to "S" fund tonight:

 

[tsptalk]

Re: Last month best fund method

Is there a resaon why we called this AutoTracker account "LMBM"? Should it be LMBF or LMBFM?

 

[bmneveu]

Re: Last month best fund method

Is there a resaon why we called this AutoTracker account "LMBM"? Should it be LMBF or LMBFM?

I believe it mistakenly abbreviates "Last Month Best Month". I agree that it should be LMBF for "Last Month Best Fund"

 

[tsptalk]

Re: Last month best fund method

I'll change it from LMBM_Method to LMBF_Method.

James, take note. Thanks!

 

[KevinD]

Re: Last month best fund method

May 10th...

The title of that thread is Last Month's Best Fund Method Strategy

Fund, Fund, Fund...

View attachment 11053

 

[Sensei]

Re: Contribution Allocation Questions

It looks like G is the winner in November with a gain of 0.14%. Even if a Santa rally boosts stocks in December, it is unlikely that any of the funds or "systems" I read about on this site will top the LMBF's return of 12+% this year. I'm seriously considering following this system in 2012.

 

[James48843]

Re: Contribution Allocation Questions

Yep- Sensi is correct- after a WILD ride last month, the November best fund turned out to me the "G" fund, at a positive 0.14%.

So....we'll be switching to the "G" fund to take us into December. Normally, I personally wouldn't do that, because of the historic "Santa Rally" effect known to have relatively positive outcomes. However, we are playing this mock account blindly, using ONLY the actual mathmatical signals, and it has done pretty dog gone well over the course of time.

So here we go- moving to "G" before noon today. Last Month Best Fund method to "G". Merry Christmas.

 

[Waterfordian]

Re: Contribution Allocation Questions

Hi all, I'm new to this forum, but have been following the LMBF thread for a while. Can someone explain if it's necessary to make the monthly switch on the first of the month, or could it be the second or third day of the month with similar results? Thanks.

 

[tsptalk]

Re: Contribution Allocation Questions

Welcome Waterfordian! Obviously your returns would be different than this system's return if you made the IFT's on a different day, but whether your return would be better or worse would depend on what happened on the days you had different allocations. By the end of the year, it would probably be a wash. Some months you would do better, some you would do worse.

 

[James48843]

Re: Contribution Allocation Questions

For the month of December, the "C" fund eeked out just a fraction better than the "F" fund for the month. Personally, I would have liked to head towards the relative safety of "F" now, but....as we are following the rules rigidly, we officially go with Last Month's Best Fund....so a switch is in order.

We'll make the fund transfer request today, but since the markets are closed on Monday, the official transfer won't be complete until the close of business on Tuesday. Good luck all for a strong 2012. We're due.

Here is December's chart:

Moving to "C" fund in the Last Month-Best Fund method.