Last Month's Best Fund Method Strategy

[tsptalk]

Re: Last month's best fund method

A bet on the I-fund is a good size bet on Europe. Probably not the greatest investment. But we should also consider that a weak dollar really helps the I-fund and the fiscal cliff talks seem to be sucking the life out of the dollar. If that trend continues the I-fund may outperform C and S. Next week it could be a different story. :blink:

 

[James48843]

Re: Last month's best fund method

Sigh...

Hey- the LMBF method is...no charge.

Don't like it? Don't follow it.

It's that simple.

 

[EfePyro]

Re: Last month's best fund method

Anyone who does not have nerves for investing in stocks ....should not.

Only venture what YOU are comfortable doing. If you are not comfortable, there is nothing wrong with keeping most of your money in safety of "G".

If you feel comfortable doing more, then, by all means, follow your heart - but never risk more than you are willing to give up, because nothing is ever certain.

Good luck.

Well said James48843. If you are not comfortable, then do what most are and leave your money in the G Fund. However, if you want to win in life and want to prosper with your investments, a risk is required. We, LMBF Followers, have found a system that works and is backed up by data. In theory, the risk is mitigated to an extent! Risks are always going to present. It is how you mitigate the risk that makes a difference.

"If you dont change, the next five years will be like your last five years"

 

[Birchtree]

Re: Last month's best fund method

So I'm told that Europe is in recession - prove it. The Europe Stoxx 600 has been up the last six consecutive months - same with the Nikkie. That recession can't be very deep and may not last very long. I'll be holding my 80% I fund until everyone else gets in and then I'll move to the C fund.

 

[Kaufmanrider]

Re: Last month's best fund method

I fund may be the best in the month, but it seems to volatile and unpredictable for me. I don't have nerves that can handle that yet.

Unpredictable and volatile? Have you been watching the US Markets since the Election? With the Fiscal Cliff coming closer and the constant political wrangling taking place I think the I fund
might be the safest place to be for now.

 

[twodaystocks]

Re: Last month's best fund method

Unpredictable and volatile? Have you been watching the US Markets since the Election? With the Fiscal Cliff coming closer and the constant political wrangling taking place I think the I fund
might be the safest place to be for now.

Although I respect your opinion, I still have to disagree. Yes, the WORLD markets have been a volatile place since September. However, when the C fund and the I fund are compared side by side on a weekly chart, the I fund closed above/below the 5 EMA 15 times, compared to only 8 times in the C fund. Everyone has their own system for trading, and the key to being successful is discovering what works best for you. I'm not saying I won't ever invest in the I fund, just probably not right now.

 

[MrBowl]

It used to be that every month I'd shake my head about what the LMBM Fund is doing, until I realized that every year I'd find myself looking up at it. For whatever reason, it has a pretty good track record. I make a point of seeing what it does at the end of each month now.

 

[Hallatauer]

This method is very simple. It doesn't apply anyones emotional, political or mistrust of other markets. It has nothing to do with TA or 50 DMA's. Whatever fund did the best last month, we invest in it this month. It has a proven track record of returning above average returns and is simple to follow. And it is free! Trying to apply some other metric to the equation muddies the waters and simply not valid to this method.

LMBF has made me lots of money in my TSP and we're keeping it this way.

 

[matrix452]

Re: Last month's best fund method

I'm stepping off this train for this month. With the ? of the so-called "Fiscal Cliff" and it being the end of the year, I want to bank my return for the year. I'm tracking a 14% return, 2 points above my annual goal. Now, I'm not saying that the political uncertainty in D.C. will lead to the market taking a dive. I believe (hope) that a deal will be struck before the 31st and hopefully the "I" will perform well. I'm just willing to forgo any additional gain in order to protect what I've earned so far.

 

[nnuut]

Re: Last month's best fund method

I'm stepping off this train for this month. With the ? of the so-called "Fiscal Cliff" and it being the end of the year, I want to bank my return for the year. I'm tracking a 14% return, 2 points above my annual goal. Now, I'm not saying that the political uncertainty in D.C. will lead to the market taking a dive. I believe (hope) that a deal will be struck before the 31st and hopefully the "I" will perform well. I'm just willing to forgo any additional gain in order to protect what I've earned so far.

Nothing wrong with that, CP is the way to go when the going gets tough no sense in losing your gains when you don't have to. I'm thinking about doing the same thing.

 

[Viva_La_Migra]

Re: Last month's best fund method

I'm stepping off this train for this month. With the ? of the so-called "Fiscal Cliff" and it being the end of the year, I want to bank my return for the year. I'm tracking a 14% return, 2 points above my annual goal. Now, I'm not saying that the political uncertainty in D.C. will lead to the market taking a dive. I believe (hope) that a deal will be struck before the 31st and hopefully the "I" will perform well. I'm just willing to forgo any additional gain in order to protect what I've earned so far.

Congratulations on the 14% gain. I'm doing the opposite. I've gone all in, hoping to squeeze out a 7% gain for the year.

 

[burrocrat]

Re: Last month's best fund method

i'm out with my 14% too. i just don't see the boohoo hooray indicators getting extreme enough to justify a jump until we all pucker up and slip the cliff. just politics and sideways chop for the foreseeable future.

 

[maxdouttsp]

Re: Last month's best fund method

I am interested if anyone has a current excel spreadsheet comparrison of the most popular methods they are willing to share with me. I have collected some data myself. I attached it for review, but I had to delete the majority of daily share prices to meet the file size limit. Most of the data was gathered from the TSP website.

I have share prices from 2005 to 2012 grouped as daily, monthly, and yearly. I have percent returns from 1988 to 2012 grouped as monthly and yearly.

I would like to add some different methods for comparison. The first method I heard of was called Seasonal. I found returns posted for that method on the forum from 1988 to 2012. I tried to back test the returns for my data but I ended up with slightly different yearly percentages. Some years I was within .02% of the forums result, and other years I was off by 8%.

I am interested in monthly/yearly results of the LMBF method or ? that is popular with the group with a positive track record.

View attachment TSP Data.xls

 

[James48843]

Re: Last month's best fund method

The reason the data varies slightly is that in the real world, we take the results on the last trading day of the month, and then, if we have to move, the move is not executed until the close of business the next day. So it may be off a tiny bit due to that extra day to execute the trade. the "Seasonal" theory, as well as other theories, all suffer from the problem of lag time in execution. It is what it is, and that sometimes may affect results.

If you would like to explore other methods, such as your "seasonal", please, by all means, start your own thread or your own account talk and get some discussion going.

This thread, however, is best left for the Last Month Best Fund (LMBF) method results and information.

Thanks in advance.

 

[craigerv]

Re: Last month's best fund method

RealMoneyIssues used to keep a huge spreadsheet of a bunch of systems but I haven't seen a post from him for a while, you may want to private message him to see if he collects it still.

That said, if you want returns for the LMBF method and you already have a spreadsheet of TSP data grouped by monthly returns it should be straight forward to generate the LMBF percent returns. Whatever the previous months best fund was you take the return of for the next month.

 

[MKeber78]

Re: Last month's best fund method

Quick question from a guy who is new to this stuff.

Could you use the LMBF method, but on a bi-weekly (every two weeks) vice a monthly basis to ride the trends more accurately due to the higher sampling rate (24'ish vs 12 a year). I thought this could be viable since TSP allows you to move your money twice a month without putting it in to the G Fund? Or is there an obsticle to this I'm missing because I'm new to it?

Thanks.

 

[craigerv]

Re: Last month's best fund method

MKeber, of course you can. I wouldn't call it the LMBF, but it follows the same methodology. You could call it the Bi-Weekly Best Fund (BWBF). That would make more use of your IFTs but also would subject you to more market fluctuations and require you spend twice the amount of time. I think it could be worth a back test.

 

[ILoveTDs]

Re: Last month's best fund method

I'll back test it through 2008

 

[ILoveTDs]

Re: Last month's best fund method

I don't know toms big formula for needing a 100% gain after a 50% drop to get back even overall. But here are the rough summing numbers.

2008 5.00%
2009 14.60%
2010 22.64%
2011 -21.10%
2012 6.67%

 

[Sensei]

Re: Last month's best fund method

I don't know toms big formula for needing a 100% gain after a 50% drop to get back even overall. But here are the rough summing numbers.

2008 5.00%
2009 14.60%
2010 22.64%
2011 -21.10%
2012 6.67%

Doesn't quite compare, does it? I once tried to conceive and backtest a Last Week Best Fund - I tried an aggressive method that would stay in whatever fund you were already in if you exceeded the 2 IFTs, and a conservative method that would go to G once you exceeded 2 IFTs. In either case, I couldn't match the Last Month Best Fund.

I think the weekly & biweekly attempts at emulating LMBF fall short because they chase gains. Whereas the LMBF - while chasing to a certain extent - is really more about following the intermediate term trend.

It's a good system and it's free. Someday, when I lose the energy to micromanage my TSP, I'll probably follow it. For now, I just use it as another tool in the box.