Some updates on my personal trading system....
First, with today's drop in the unemployment rate back down to 4.9%, my bear market indicator is turned back off since the 4.9% rate is now back below the 12-month moving average (currently at 4.93%). So a further drop in the S&P price no longer matters, and it's full-steam ahead for my system and I think that once the lemmings are done selling over the next week or so the markets will do well into year-end barring a significant deterioration in fundamentals.
I've also now reached a milestone in my ongoing project to figure out whether or not to roll over to an IRA when I retire. The results came out as I expected (the TSP's ultra-low fees can't be beat and make a difference over time). My first look was a simulated TD Ameritrade account where I'd use ETF's that mimic the TSP funds, using ETFs from TD Ameritrade's commission-free list as much as possible (I plan to also evaluate the same system using Vanguard and Charles Schwab IRAs). The funds I used were AGG, IVV, VXF, and EFA until 2007 when Vanguard's VEA came into existence, then VEA since then. It was very tedious, taking me months of work in my free time, making sure I included subtracting trading fees when the ETFs are held less than 30 days per TD Amertrade's rules, including SEC fees on all trades (they become significant as the account grows), and making sure every dividend was properly added. My daily data goes back to 12/31/03, and monthly data back to January 1984, so in just two more months I will have a full 30 years of data to work with.
Below is a summary of the results. The answer to the big question is that,
in my opinion, it's a big mistake for anyone to roll over there TSP to an IRA upon retirement unless you absolutely can't live with the TSP's restrictive withdrawal options, or, if you are really brave and can sleep at night by shorting the stock market during bear markets. My "bull/bear" system has been great at timing the last two bear markets (will it work for the next one?, I have no idea), and the ridiculous results below for the bull/bear system using ETFs incorporates shorting the market in late 2007 through most of 2008 using the inverse S&P 500 ETF "SH". The results are astounding, but even so I don't plan to abandon the TSP when I retire. I think staying in the TSP is so much simpler, especially if I'm hit by the Creamland ice cream truck and my wife as to take over trading the TSP account...it will be a simple thing for her since with my system I'll have all the future IFTs worked out for the next 40 years or so, just a dozen or so IFT's per year, and one should be able to reap double-digit returns on average if history repeats (granted, that's a big if, but with 13 years and counting I'm convinced it works and I can easily achieve my personal goal of 8%/year during retirement).
The following compound annual returns are for the period 1/1/2004 through 12/31/2015:
Buy and hold the C fund: 7.44% ---- Buy and hold an equivalent ETF (IVV): 7.40% (I'll look at VOO next, but expect similar results)
Buy and hold the S fund: 9.03% ---- Buy and hold an equivalent ETF (VXF): 8.74%
Basic seasonal strategy using G/F/C/S/I: 14.93% ---- Equivalent strategy using ETFs (no G fund ETF exists though, so only AGG): 14.29%
Enhanced seasonal strategy: 21.82% (and has beaten the S&P 500 13 straight years) ---- Equivalent strategy using ETFs: 20.82%
Bull/Bear seasonal strategy: 22.43% ---- Equivalent strategy using ETFs, including SH during the last bear market: 27.88% (wow
)
Lastly, the year-to-date returns for 2016 through October 31st....
TSP Basic: +16.22% ---- ETF Basic: +17.81%
TSP Enhanced (and Bull/Bear): 13.61% ---- ETF Enhanced (and Bull/Bear): +15.08%
My challenge has been to follow my own system, but I finally have been doing that (almost, my IFTs have varied from what the system said to do by one day for each move, and it's cost me each and every time, argh) since July...and my actual return for 2016 is 3% better than what the auto tracker shows, which is still awful, but has done fine since July. As Cubs fans said for 108 years, wait until next year! I'll finally be following my system in the tracker as long as I remember to enter the IFTs.
Market is turning green...so many indicators are at very oversold levels...nice divergences abound...I don't pay much attention to such things any more but I sure wouldn't be a seller here. Getting beyond the election should eliminate the last roadblock.
On a personal note, I landed a new job yesterday that I've had my eye on for over a decade, nabbing the job of someone retiring...so I'll likely be hanging on until 2019 to boost my high-3 and pad the TSP and other savings.
That's got be 30 years ago now.
GO COUGS! Nice not to be in "Pucker Mode" til end of Game, whew. Wazzu football in a bullish-pattern after some sideways movement with steady gains & not dropping below support or filling lower gaps, hopefully heading towards end of season peak.
