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Thread: Last Month's Best Fund Method Strategy

  1. Default 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.

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  3. #242

    Default 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.
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.

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  5. #243

    Default Re: Contribution Allocation Questions

    Quote Originally Posted by bfranklin03 View Post
    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.
    God bless the United States of America!


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  7. #244

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    Default 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:
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  9. #245

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    Default Re: Contribution Allocation Questions

    Quote Originally Posted by James48843 View Post
    ...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!

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  11. #246

    Default 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.
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.

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  13. #247

    Default Re: Contribution Allocation Questions

    Quote Originally Posted by Sensei View Post
    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.
    100% I August 14 (cob 8/14). Trying it again until Oct.

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  15. #248

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    Default 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!

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  17. #249

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    Default Re: Contribution Allocation Questions

    Quote Originally Posted by DakotaKid View Post
    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.

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  19. #250

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    Default 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:
    month=09-2011.jpg

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  21. #251

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    Default 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:

    lmbm-oct.jpg

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  23. #252

    Default Re: Last month best fund method

    Is there a resaon why we called this AutoTracker account "LMBM"? Should it be LMBF or LMBFM?
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.


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