Thread: Alternate LMBF methods

Boghie, here are the numbers I come up with given your entries for 2008 - 2014.

boghie.png

This treats the 2014 numbers as if they are the year end values. I assumed you were doing the same. There is no inflation calculated into these numbers like you have for your returns. I included the SSD (Sample Standard Deviation) because it looks like that is what you are using for risk. I use the PSD (Population Standard Deviation) and thought moneychimp did the same. I could be wrong on that.

The values look close for the 5 TSP funds but are off for some of the users and L Funds. You will want to look at my numbers and see if I typed them in correctly.

If you don't want to use a spreadsheet you may want to write a script or program that crunches the numbers for you. You could write it to accept manual input if you only have a few entries like here or you can write it to accept a file of data for larger entries. Just a thought

You are doing well with your system. Keep up the good work.

Here are the results through November:

	G	F	C	S	I	LMBF	LMBF-1	C>S	CI>S	SIM	G>F
Jan	0.21%	1.58%	(3.45%)	(1.91%)	(4.03%)	(1.82%)	(1.91%)	(1.91%)	(1.91%)	(1.91%)	(1.91%)
Feb	0.18%	0.62%	4.58%	5.43%	5.58%	(2.82%)	0.62%	0.62%	0.62%	0.62%	0.62%
Mar	0.19%	(0.15%)	0.85%	(0.69%)	(0.57%)	1.51%	(0.69%)	(0.69%)	(0.69%)	(0.69%)	(0.69%)
Apr	0.20%	0.90%	0.75%	(2.47%)	1.51%	0.44%	0.20%	0.20%	0.20%	0.20%	0.90%
May	0.20%	1.21%	2.35%	1.52%	1.72%	1.35%	1.72%	1.72%	1.52%	1.21%	1.72%
Jun	0.19%	0.14%	2.07%	4.45%	0.99%	2.19%	2.07%	4.45%	4.45%	0.14%	2.07%
Jul	0.19%	(0.19%)	(1.37%)	(4.38%)	(1.95%)	(4.58%)	(4.38%)	(4.38%)	(4.38%)	(0.19%)	(4.38%)
Aug	0.20%	1.12%	4.01%	4.98%	(0.14%)	(0.04%)	4.01%	4.98%	4.98%	1.12%	4.01%
Sep	0.18%	(0.58%)	(1.40%)	(5.10%)	(3.82%)	(5.43%)	(5.10%)	(5.10%)	(5.10%)	(0.58%)	(5.10%)
Oct	0.20%	0.96%	2.45%	4.11%	(0.63%)	(1.28%)	0.20%	0.20%	0.20%	0.96%	0.96%
Nov	0.17%	0.74%	2.70%	1.33%	0.51%	1.35%	1.33%	1.33%	1.33%	1.33%	1.33%
YTD	2.12%	6.52%	14.06%	6.74%	(1.19%)	(9.07%)	(2.28%)	0.93%	0.73%	2.18%	(0.85%)

As you can see, it's pretty much the same as last month. All our methods gained over 1.3% and C>S & CI>S even turned positive for the year. Other than that it's more of the same. Buy & Hold still reigns supreme and SIM is still the clear winner among our methods this year.

The one remaining question is: with one month left, can all the LMBF-1 methods turn positive for the year? Well, they are all in the market for December, so given a decent Santa Clause rally it is possible.

What more can I say. Oh, I see that James posted the LMBF IFT for December after missing it for October and November. So it looks like LMBF is still alive and with us even if its AT is hopelessly off for 2014. That's one problem with the AT. If you miss an entry you can't go back and correct it afterwards. It's that way by design so we can't cheat and postdate our IFTs, but it also means we can't state what an IFT should have been if we weren't able to record the IFT. The same thing can happen to me. I can't guarantee that I will be here at the end of every month to record the IFTs, so feel free to post them in this thread if it becomes clear I'm not around or even if I am around.

We'll get the final numbers at the end of the day, but right now it looks like all the LMBF-1 methods will IFT into the S Fund tomorrow.

Here are the monthly returns as of 12/30/2014.

Date	G FUND	F FUND	C FUND	S FUND	I FUND
30-Dec-2014	0.18%	0.06%	0.79%	1.76%	(3.28%)

The best fund is S so the following IFTs take place before noon eastern tomorrow, 12/31/2014:

• LMBF-1 Changes from the C Fund to the S Fund
• LMBF-1 SIM Changes from the C Fund to the S Fund
• LMBF-1 C>S Remains in the S Fund
• LMBF-1 CI>S Remains in the S Fund
• LMBF-1 G>F Changes from the C Fund to the S Fund

We all go into 2015 invested in the S Fund. Happy investing everyone.

Easy as most of us were in the S Fund for Dec. Not a great year for me but still in the positive... 3.27%. Looks like we all would have been better if when had just stayed in the S Fund, 7.80% or even the C Fund at a huge 13.78% but that's the nature of the game I guess. Lets hope for an awesome 2015!

OK, December is finished so lets see how these Methods finished out the year.

	G	F	C	S	I	LMBF	LMBF-1	C>S	CI>S	SIM	G>F
Jan	0.21%	1.58%	(3.45%)	(1.91%)	(4.03%)	(1.82%)	(1.91%)	(1.91%)	(1.91%)	(1.91%)	(1.91%)
Feb	0.18%	0.62%	4.58%	5.43%	5.58%	(2.82%)	0.62%	0.62%	0.62%	0.62%	0.62%
Mar	0.19%	(0.15%)	0.85%	(0.69%)	(0.57%)	1.51%	(0.69%)	(0.69%)	(0.69%)	(0.69%)	(0.69%)
Apr	0.20%	0.90%	0.75%	(2.47%)	1.51%	0.44%	0.20%	0.20%	0.20%	0.20%	0.90%
May	0.20%	1.21%	2.35%	1.52%	1.72%	1.35%	1.72%	1.72%	1.52%	1.21%	1.72%
Jun	0.19%	0.14%	2.07%	4.45%	0.99%	2.19%	2.07%	4.45%	4.45%	0.14%	2.07%
Jul	0.19%	(0.19%)	(1.37%)	(4.38%)	(1.95%)	(4.58%)	(4.38%)	(4.38%)	(4.38%)	(0.19%)	(4.38%)
Aug	0.20%	1.12%	4.01%	4.98%	(0.14%)	(0.04%)	4.01%	4.98%	4.98%	1.12%	4.01%
Sep	0.18%	(0.58%)	(1.40%)	(5.10%)	(3.82%)	(5.43%)	(5.10%)	(5.10%)	(5.10%)	(0.58%)	(5.10%)
Oct	0.20%	0.96%	2.45%	4.11%	(0.63%)	(1.28%)	0.20%	0.20%	0.20%	0.96%	0.96%
Nov	0.17%	0.74%	2.70%	1.33%	0.51%	1.35%	1.33%	1.33%	1.33%	1.33%	1.33%
Dec	0.18%	0.21%	(0.24%)	0.99%	(4.13%)	(1.09%)	(0.24%)	0.99%	0.99%	(0.24%)	(0.24%)
YTD	2.31%	6.73%	13.78%	7.80%	(5.27%)	(10.06%)	(2.52%)	1.93%	1.73%	1.94%	(1.09%)

Not too good as it turns out. This wasn't a Buy-N-Hold year but you still would have been better off holding any of our Funds except the I Fund this year. Ouch, that hurts when even the G Fund beats you. So this wasn't the year for these methods.

Comparing the methods to each other, we still see that the SIM, C>S, and CI>S options produce better results that LMBF-1 alone. It also helps that their returns were positive. The new G>F option also produced a better return even if the return was still negative. This option is probably better combined with one of the >S options.

Finally, notice that LMBF really had a hard time this year. Of course it could have gone the other way and LMBF-1 could have fallen hard. Comparing these two shows how much of a difference one day can make over time.

OK, here are the 3, 5, & 10 Year returns for you folks who like numbers. Note that things don't look that great for these methods on the 3 & 5 year returns which only include up years, but look better on the 10 year which includes 2008's returns. These methods help us more in down years than up years where buy-N-hold prevails.

3 Year Returns:

3 Year (2012 - 14)	G	F	C	S	I	LMBF	LMBF-1	C>S	CI>S	SIM	G>F
Mean	1.89%	3.13%	20.77%	21.57%	11.83%	6.14%	11.11%	14.74%	16.33%	11.55%	11.87%
Standard Deviation	0.34%	3.51%	8.31%	12.65%	12.17%	12.17%	10.69%	11.00%	10.35%	7.00%	10.12%
Annualized Return	1.89%	3.07%	20.49%	20.93%	11.13%	5.42%	10.59%	14.21%	15.85%	11.33%	11.41%
Total Return	5.78%	9.49%	74.92%	76.84%	37.24%	17.15%	35.26%	48.99%	55.48%	37.97%	38.27%

5 Year Returns:

5 Year (2010 - 14)	G	F	C	S	I	LMBF	LMBF-1	C>S	CI>S	SIM	G>F
Mean	2.19%	4.80%	15.89%	18.08%	6.32%	8.70%	11.88%	14.05%	15.03%	15.63%	12.82%
Standard Deviation	0.46%	3.42%	9.69%	14.82%	13.17%	9.94%	8.77%	8.99%	8.22%	8.53%	8.16%
Annualized Return	2.18%	4.74%	15.50%	17.13%	5.49%	8.21%	11.52%	13.70%	14.73%	15.31%	12.51%
Total Return	11.41%	26.06%	105.51%	120.51%	30.64%	48.36%	72.52%	90.03%	98.79%	103.84%	80.30%

10 Year Returns:

10 Year (2005 - 14)	G	F	C	S	I	LMBF	LMBF-1	C>S	CI>S	SIM	G>F
Mean	3.19%	4.93%	9.54%	11.82%	7.06%	6.25%	10.13%	12.89%	13.48%	11.13%	10.95%
Standard Deviation	1.18%	2.67%	17.91%	20.96%	20.69%	9.34%	9.77%	11.40%	12.76%	9.65%	9.50%
Annualized Return	3.19%	4.90%	7.72%	9.44%	4.58%	5.82%	9.68%	12.29%	12.77%	10.72%	10.52%
Total Return	36.85%	61.30%	110.41%	146.40%	56.43%	76.02%	151.85%	218.81%	232.74%	176.77%	171.94%

Here are the monthly returns as of 1/29/2015.

Date	G FUND	F FUND	C FUND	S FUND	I FUND
29-Jan-2015	0.17%	1.77%	(1.72%)	(0.34%)	1.73%

The best fund is F so the following IFTs take place before noon eastern today, 1/30/2015:

• LMBF-1 Changes from the S Fund to the F Fund
• LMBF-1 SIM Changes from the S Fund to the F Fund
• LMBF-1 C>S Changes from the S Fund to the F Fund
• LMBF-1 CI>S Changes from the S Fund to the F Fund
• LMBF-1 G>F Changes from the S Fund to the F Fund

Note that volatility is high and the I Fund almost took the lead from the F Fund. It may get there tomorrow. Who knows.

Hey Cactus, thanks for posting the numbers and updating the auto-tracker.

A few weeks ago James came up with what I thought was an interesting idea/variant on the LMBF method. Not sure if you've tried this yet, but James idea was to NOT EFT into a stock fund if it was a case where two of the three stock funds were in the red. In the most recent instance his idea would have kept us out of the stock funds this month avoiding a loss (granted the I fund might eek out a gain, but none of the methods would have IFT'd into the I fund).

Anyway, just thought I'd post it here to see what you think. You can see James' original post in the LMBF thread.

Yes, I saw the original post. I was going to wait until James clarified the rules and settled on what exactly he wanted instead of working on something only to have him tweak it some more. For example, if you look at his original post he stated: "two out of three of the stock/bond funds are in negative territory." Does he mean 2 out of the 3 stock funds (C, S & I) or does he mean 2 out of the 4 funds F, C, S & I. If it's the latter you might as well say any 2 funds since G doesn't go negative (heaven help us if it did). So if C & S are positive and F & I are negative we go to G. That is the way I understand his tweak. Also further down he mentions avoiding "F". What does that mean? Does he mean if LMBF is F we go to G? Does he mean we don't even use F but only the other 4 funds? This isn't clear yet and may not even have been decided until it occurs. Anyways, if I look at producing any back-tested results it would be based on LMBF-1 instead of LMBF. Remember I originally developed LMBF-1 because it was a lot easier to work with and less error prone than working with historical LMBF data in spreadsheets.

Originally Posted by Cactus

If it's the latter you might as well say any 2 funds since G doesn't go negative (heaven help us if it did).

Amen... but that might be a way for the government to take more of our money... Doesn't one of the Scandinavian countries have negative interest rates... Utopia (stopping now before I get banned)