I have been a registered member of TSP Talk in some capacity or another since 2004. This site has provided me with tons of invaluable information about investing in not only the Thrift Savings Plan (TSP), but also in the stock market in general. I have used this information to develop a trading system and strategy that will help maximize our returns with not only the TSP, but also with other outside investment options.
Overview Of Intrepid_Timer's Trading Strategies
My trading strategies are based on my proprietary trading system, which is a weighted system that tracks a basket of currencies and commodities along with the VIX, moving averages and proprietary timing patterns. I have backtested this system through the middle of 2006 and it has passed all my tests as far as returns and ease of use.
When applied to the Thrift Savings Plan (TSP), this system becomes a low risk trading system because you are sitting in the G fund for most of the month. It will typically give one signal per month to enter the TSP equity funds (C, S or I funds) and will usually give one signal per month to enter the F fund as well. When these signals occur, you will only be in each fund for approximately 1-2 weeks on average. This means that in most months you will be sitting in the safety of the G fund about 50% of the time. Even though you'll be making about three IFT's per month between the G fund, F fund and equity funds, being in equities for only about 1-2 weeks per month actually lowers your risk compared to being in equities for long periods of time, like a buy-and-hold strategy where you are at the mercy of the markets. Instead, you will be implementing your own risk management strategy by deciding when and for how long you are in the markets,
Because my timing system typically gives two signals to buy equities per month, returns with TSP will ultimately depend on which signal is chosen to follow and how one allocates their IFT. One can either follow the signal early in the month or wait for the one later in the month. Over 80% of my systems TSP buy signals will produce positive returns so it's a good problem to have. I will post the allocation and go with the signal that I believe gives the best opportunity to make the highest return for the month and I have indicators in place to tell me which buy signal to use for TSP. In this regard, my TSP strategy ONLY gives one buy signal per month, but it you miss that signal, my timing system itself could give another opportunity later in the month if you choose to wait for it instead of jumping in the following day and I will let you know all buy and sell signals that are given. This actually gives you more options over other TSP trading services that only offer one specific buy signal during any given month. If you don’t like the setup early in the month, simply wait for the next buy signal. I also usually go 100% into one fund or another, but others may choose to diversify more into each of the other funds.
My strategy for trading ETFs and/or mutual funds is to purchase long funds when my system gives me a buy signal and to purchase their corresponding inverse short fund when I get a sell signal. Staying within the same family of funds is important with mutual funds because you can just exchange one fund for the other instead of buying and selling them. If you were to sell one fund, you'd have to wait for the funds to settle before you could use that money to buy another one. Staying in the same family of funds isn't as important with ETFs, but I usually do it anyway. Even though my trading system is based on the stock market as a whole, one index or one sector may outperform another on a short term basis and if you start switching between sectors or going from a broad based index fund to a more specialized sector, you may end up buying and selling at the wrong time. Not that this can't be profitable, it just makes things a little more difficult. The best thing about trading ETFs and/or mutual funds outside of TSP is that you have the option of trading all the signals produced by my system. With TSP, we have to be a bit more selective.
With my trading system, one could also trade individual stocks. However, I do not recommend this because individual companies have much higher risk than a sector or index fund with multiple stocks. If one really wanted to go this route, I'd recommend choosing several different companies to either long or short in order to lessen some of the inherent risk of investing in only one company.
The goal of my investment strategy with TSP is to average a return of about 1-2% a month or 12-24% per year, even during prolonged bear markets. This is possible because, even during bear markets, there is at least one opportunity in most months to make a quick trade and profit in the equity funds. My trading system helps to pinpoint these opportunities. My personal goal is to make 24% every year, but I have very high expectations of the work I do.
The goal of my ETF and mutual fund strategies is to make AT LEAST 50% each year, although they'll most likely do much better. One can use long ETF fund and their corresponding inverse fund (short), or they can use something like UPRO (long S&P 500) for equity buy signals and TLT (long bonds) for equity sell signals. Doing this means one is never actually short anything, just like our TSP strategy.
With my service, you can expect to have my system signal posted by 11:30pm EST whenever I get a signal change. I know this doesn’t give a one a lot of time prior to out noon ET deadline, but it’s the best I can do and still get the necessary data that I need at the proper time. I will also be posting a spreadsheet with my current signals and returns and provide daily market analysis on the markets in general. This analysis will be posted between 9-9:30am ET M-F. At that time, I will give a preliminary “heads-up” as to whether or not I may be giving a signal change before 11:30am ET that day, but that would still be subject to change prior to actually posting the signal.