Thread: Last Month's Best Fund Method Strategy

I'll back test it through 2008

I don't know toms big formula for needing a 100% gain after a 50% drop to get back even overall. But here are the rough summing numbers.

2008 5.00%
2009 14.60%
2010 22.64%
2011 -21.10%
2012 6.67%

Originally Posted by ILoveTDs

I don't know toms big formula for needing a 100% gain after a 50% drop to get back even overall. But here are the rough summing numbers.

2008 5.00%
2009 14.60%
2010 22.64%
2011 -21.10%
2012 6.67%

Doesn't quite compare, does it? I once tried to conceive and backtest a Last Week Best Fund - I tried an aggressive method that would stay in whatever fund you were already in if you exceeded the 2 IFTs, and a conservative method that would go to G once you exceeded 2 IFTs. In either case, I couldn't match the Last Month Best Fund.

I think the weekly & biweekly attempts at emulating LMBF fall short because they chase gains. Whereas the LMBF - while chasing to a certain extent - is really more about following the intermediate term trend.

It's a good system and it's free. Someday, when I lose the energy to micromanage my TSP, I'll probably follow it. For now, I just use it as another tool in the box.

I agree with Sensei. The LMBF seems to catch larger momentum in equities and give you gains in the trending periods but on a bi-weekly basis there is probably too much volatility that it will throw off the system. As far as the returns show though, it seems to do a decent job but that 2011 return is one of those things that I would tend to design a safety catch for.

Thanks for the input gentlemen! Looks like I'll be jumping on the LMBF bandwagon with the rest of you.

Please do me a favor and check my math. These are the funds we actually IFT'ed into each month starting Jan 1st and their returns the last day of that month. Ive been sick this whole week and cant concentrate on a thing.

Thanks

Date	Fund % Gain	Fund Allocation
January-12	4.50%	C
February-12	3.99%	S
March-12	0.13%	I
April-12	-0.62%	C
May-12	0.91%	F
June-12	0.05%	F
July-12	0.56%	I
August-12	2.25%	C
September-12	2.51%	S
October-12	0.85%	I
November-12	2.41%	I
December-12		I
Total	17.54%

Originally Posted by MKeber78

Quick question from a guy who is new to this stuff.

Could you use the LMBF method, but on a bi-weekly (every two weeks) vice a monthly basis to ride the trends more accurately due to the higher sampling rate (24'ish vs 12 a year). I thought this could be viable since TSP allows you to move your money twice a month without putting it in to the G Fund? Or is there an obsticle to this I'm missing because I'm new to it?

Thanks.

I finally crunched out hard numbers.

Ok here is what I see for LMBF.

2008 - (12.10)%
2009 - 12.00%
2010 - 12.73%
2011 - 10.58%
2012 - 15.18% (as of 3 Dec)

Total since 1 Jan 08 41.34%

Ok I'll call this one PPE. After every payday COB calculate return over the past two weeks and buy into that fund COB Monday. For months with three PPE if last best fund is in equities and your in equities stay. If best fund not in equities move to G Fund.

2008 - (5.88)%
2009 - 7.61%
2010 - 22.36%
2011 - (12.97)%
2012 - 19.44% (as of 3 Dec)

Total since 1 Jan 08 28.83%


Ok I'll call this on BWBF. After COB last day of month and 15th every month you calculate the best fund since the previous calculation. Get in best fund COB first trading day of month and COB first trading day after 15th.

2008 - 3.09%
2009 - 7.54%
2010 - 28.11%
2011 - (19.65)%
2012 - 5.05% (as of 3 Dec)

Total since 1 Jan 08 19.87%

Ok last on I'll call mid month. After COB last day of month and 15th every month you calculate the best fund over the last month. Get in best fund COB first trading day of month and COB first trading day after 15th.

2008 - (0.62)%
2009 - 19.21%
2010 - (5.09)%
2011 - (3.44)%
2012 - 11.76% (as of 3 Dec)

Total since 1 Jan 08 44.65%

I think your math is messed up. Looking at the mid-month numbers:
( 1-.0062 )*( 1.1921 )*( 1-.0509 )*( 1-.0344 )*( 1.1176 ) = 1.2134 ... or an overall increase of 21.34%

"[QUOTE=ILoveTDs;385079]I don't know toms big formula for needing a 100% gain after a 50% drop to get back even overall. But here are the rough summing numbers."


If $1000 loses 50% you have $500. In order to get back to $1000, the remaining $500 would need to gain 100%. Gaining 50% of $500 only results in $750.

What do they say...you only get comments if you matter...clearly LMBF...you matter...right on right on....something so simple is very complex...so they say....jealousy is the best form of flattery....

Great month for the I Fund, over 4% gain for December. We will be keeping it here for the month of January 2013. Good luck to everyone and have a great New Year!