Newsletter 2/27/15

Quick Recap of the Week

First a note–our allocation is changing to 100% S Fund. Please make your IFT and contribution allocation before noon EST on Monday, 3/2/2015.

Last week U.S. stocks fell moderately in choppy, indecisive trading. Most economic data was worse-than-expected. Of the TSP Funds, the F Fund had the best week with a 0.70% gain. The I Fund advanced by 0.49%. The C and S Funds had losses of -0.24% and -0.32%, respectively.

A Note About the Markets and our System

The markets have been difficult to decipher over the last 6 months. Just when a TSP fund begins a clear upward trend, it seems to fall or go flat. For investors who follow the market’s trends (like us), these are challenging conditions.

This prompted us to do a lot of research and testing. Based on this, our system will incorporate certain seasonal patterns. We did this with good success in 2012-2013.

When it’s a good “season” for stocks (like now), at least 50% of our allocation will be in stock funds. When it’s a historically poor season for stocks, at least 50% of our allocation will be in the G or F Fund.

We’ll continue to follow the market’s trends as well. Following trends/momentum is the most proven way to outperform buy-and-hold. Studies going as far back as 800 years show this.

Certain seasonal patterns have strong track records, too. One has outperformed the market for over 300 years. Our testing shows that combining seasonality and trends gives more stable, consistent results over time. This is what we’re striving to achieve.

YTD Return as of 2/27/15: -1.91%
Current allocation: 100% S Fund as of 3/2/15
New Trades: IFT from 100% F Fund to 100% S Fund before noon EST on Monday, 3/2/2015

TSP Fund Performance (2/27/2015 YTD)