TSP Advisory Services Performance for 2005-2007

Three Years - 2005 - 2007

1. Thrift Trading 53.9%
2. TSP Advisory 47.3%
3. TSP GO High Risk 46.3%
4. TSP Key 41.8%
5. TSP Report 36.4%
6. TSP Wealth 27.8%
7. TSP Max 23.4%
8. TSP Pilot 22.4%
9. TSP Talk -(0.5)%

TSP Strategy 59.9%

How are YOUR TSP returns?

May So Far

S fund 2.5%
I fund 2.4%
L 2040 1.4%
L 2030 1.2%
L 2020 1.0%
C fund 0.8%
L 2010 0.7%
L Inc 0.4%
G fund 0.2%
F fund -0.2%

As they say in the Kentucky Derby, we're coming to the final turn for this month! Is this how the horses will finish? What do you think?

Midyear Election Year Indicators

First, remembering that this year ends in an "8", we should consider that over the past 9 decades, years ending in 8 were up 78% of the time (7 of 9).

Second, with respect specifically to Presidential Election Years, they have been UP from June to December 81% of the time since 1924 (17 of 21). (see below)

In other words, we have several bullish indicators for the remainder of this year.

1924 - up
1928 - up
1932 - up
1936 - up
1940 - up
1944 - up
1948 - down
1952 - up
1956 - up
1960 - down
1964 - up
1968 - up
1972 - up
1976 - down
1980 - up
1984 - up
1988 - up
1992 - down
1996 - up
2000 - up
2004 - up

Current TSP Returns

YTD: F fund 2.2%, G fund 1.3%, I fund -0.4%, S fund -0.8%, C fund -2.2%,

4 years: I fund 97.3%, S fund 59.5%, C fund 40.3%, F fund 23.6%, G fund 19.7%
3 years: I fund 65.4%, S fund 40.6%, C fund 29.6%, F fund 15.7%, G fund 14.5%
2 years:I fund 22.3%, F fund 15.2%, C fund 14.7%, S fund 12.4%, G fund 9.5%
1 year: F fund 7.3%, G fund 4.4%, I fund -1.5%, S fund -3.1%, C fund -4.0%
6 mo: F fund 3.4%, G fund 1.9%, I fund 0.0%, S fund -0.4%, C fund -1.3%,
3 mo: I fund 11.9%, S fund 6.7%, C fund 6.2%, F fund 1.2%, G fund 0.8%
2 mo: S fund 12.6%, I fund 11.9%, C fund 11.0%, F/G fund 0.6%
1 mo: S fund 5.3%, C fund 4.6%, I fund 4.2%, F fund 0.7%, G fund 0.2%
2 wk: I/S fund 2.7%, C fund 0.9%, F fund 0.2%, G fund 0.1%
1 wk: I fund 3.5%, S fund 3.1%, C fund 2.7%, G fund 0.1%, F fund -0.2%,

Equities lead over the past three months.
S fund leads over past two months.
I fund leading over past two weeks.

Election Years: From June to Dec

You'll be pleased to learn that, at least since 1952, 93% of the time (13 of 14 years), the last 7 months of an election year is decidedly bullish. The average gain for the period has been 7.2% for the S&P 500. The only exception was 2000, a most exceptional election year.

Why so bullish? As I've explained in the past, election years in general tend to be traditionally bullish, second only to pre-election years. Largely, this seems to be due to incumbents attempting to keep the bull going (literally) so that their party can remain in power. How do they do this? By lowering interest rates, even during a highly inflationary era. Sound familiar? Will it work this time also? What do YOU think?

Current TSP Returns

YTD: F fund 2.2%, G fund 1.3%, S fund -1.0%, I fund -1.4%, C fund -2.3%,

4 years: I fund 95.4%, S fund 59.1%, C fund 40%, F fund 23.6%, G fund 19.7%
3 years: I fund 63.6%, S fund 41.9%, C fund 30.7%, F fund 15.7%, G fund 14.7%
2 years:I fund 20.6%, F fund 15.5%, C fund 14.3%, S fund 12.1%, G fund 9.6%
1 year: F fund 7.4%, G fund 4.4%, I fund 0.2%, S fund -2.8%, C fund -3.2%
6 mo: F fund 3.3%, G fund 1.9%, S fund -0.7%, C fund -0.9%, I fund -1.1%
3 mo: I fund 10.8%, S fund 6.5%, C fund 6.0%, F fund 1.2%, G fund 0.8%
2 mo: S fund 12.3%, I/C fund 10.8%, F/G fund 0.6%
1 mo: S fund 7.8%, C fund 6.9%, I fund 6.7%, G fund 0.2%, F fund 0.1%
2 wk: S fund 2.4%, I fund 2.2%, C fund 1.1%, G fund 0.2%, F fund 0%
1 wk: S fund 2.6%, C fund 1.9%, I fund 1.3%, G fund 0.1%, F fund -0.2%,

Equities lead over the past three months.
S fund leads over past two months.

How Have You Done Since the January Low?

The markets hit bottom this year on Jan 23rd. Since then, returns have been as follows:

I fund 11.7%
S fund 8.6%
C fund 5.5%
G fund 1.1%
F fund -0.8%

Which funds will continue to lead?

Current TSP Returns

YTD: F fund 2.3%, G fund 1.3%, I fund -2.6%, S fund -2.7%, C fund -3.7%,

4 years: I fund 90.2%, S fund 55.8%, C fund 38%, F fund 23.7%, G fund 19.7%
3 years: I fund 60.5%, S fund 38.6%, C fund 28.3%, F fund 15.9%, G fund 14.7%
2 years:I fund 17.4%, F fund 15.9%, C fund 13%, G fund 9.6%, S fund 9.5%
1 year: F fund 7.3%, G fund 4.5%, I fund -0.7%, C fund -4.9%, S fund -5.6%,
6 mo: F fund 3.7%, G fund 2.0%, C fund -2.4%, S fund -2.9%, I fund -3.2%
3 mo: I fund 9.6%, C fund 4.7%, S fund 4.5%, G fund 0.9%, F fund 0.7%
2 mo: S fund 9.6%, C fund 7.6%, I fund 7.4%, F fund 0.8%, G fund 0.6%
1 mo: S fund 6.3%, I fund 5.6%, C fund 5.5%, G fund 0.3%, F fund -0.2%
2 wk: S fund 1.4%, I fund 1%, F fund 0.7%, C fund 0.6%, G fund 0.2%
1 wk: S fund 0.8%, I/F fund 0.2%, G fund 0.1%, C fund -0.2%,

Equities still lead over the past three months.
S fund leads over past two months.

TSP Advisory Services YTD

1. Matt's TSP Blog 7.7% (free)
2. TSP Max 1.4% ($100/yr)
3. TSP GO HR -(1.1)% (free)
4. TSP Fred -(2.9)% ($162/yr)
5. Maximizing TSP -(4.2)% ($240/yr)
6. TSP Key -(5.0)% ($100/yr)
7. Ebbchart -(11.6)% ($162/yr)

TSP Strategy -(3.8)% (free)
_______________________________________________
The following are not as of 5/9

Thrift Trading 4.8% (thru 4/25) ($279/yr)
TSP Wealth 2.7% (thru 5/2) (free)
TSP Wire -(4.5)% (thru 4/5) (free)
TSP Advisor -(4.8)% (thru 3/31)($120/yr)
TSP Report -(11.1)% (thru 4/15) ($100/yr)
________________________________________________
The following do not list YTD returns.

TSP Advisory ($55/yr)
TSP Pilot ($150/yr)

If you have questions about the TSP, you might want to join us in the TSP Strategy Forum, a small group of TSPers trying to grow our returns.

I Fund Leads Over Three Months Despite Strong USD

Current TSP Returns

YTD: F fund 2.3%, G fund 1.2%, I fund -2.7%, S fund -3.5%, C fund -4.1%,

4 years: I fund 87.3%, S fund 53.3%, C fund 37.3%, F fund 24.1%, G fund 19.7%
3 years: I fund 56.8%, S fund 35.9%, C fund 26.5%, F fund 16.4%, G fund 14.7%
2 years:I fund 15.6%, F fund 15.5%, C fund 9.7%, G fund 9.6%, S fund 4.5%
1 year: F fund 7.2%, G fund 4.4%, I fund -0.9%, C fund -5.4%, S fund -6.3%,
6 mo: F fund 4%, G fund 1.9%, C fund -4.2%, S fund -5%, I fund -5.3%
3 mo: I fund 11.8%, C fund 5.6%, S fund 4.5%, G fund 0.8%, F fund 0.7%
2 mo: I fund 10%, S fund 9%, C fund 8.4%, F fund 1.5%, G fund 0.6%
1 mo: I fund 3.3%, C/S fund 2.5%, G/F fund 0.2%
2 wk: I fund 2.8%, S fund 1.8%, F fund 1%, C fund 0.8%, G fund 0.1%
1 wk: I fund 0.9%, S/F fund 0.2%, G fund 0.1%, C fund -0.8%,

Note that the I fund now consistently leads over the past three months, two months, one month, two weeks and one week despite a concomitant rise in the USD. Why would that be? What do you think?

Equities Continue to Lead Over Three Months

Current TSP Returns

YTD: F fund 1.8%, G fund 1.2%, I fund -2.6%, S fund -2.7%, C fund -2.8%,

4 years: I fund 79.5%, S fund 49.5%, C fund 36.3%, F fund 22.1%, G fund 19.7%
3 years: I fund 57.1%, S fund 35.4%, C fund 28%, F fund 15.3%, G fund 14.7%
2 years:I fund 16.2%, F fund 14.9%, C fund 11.2%, G fund 9.6%, S fund 5.6%
1 year: F fund 6.8%, G fund 4.5%, I fund -1.1%, C fund -3.9%, S fund -5.6%,
6 mo: F fund 3.7%, G fund 1.9%, C fund -5.7%, S fund -6.3%, I fund -6.6%
3 mo: I fund 10.8%, C fund 7.4%, S fund 6.4%, G fund 0.9%, F fund -0.1%
2 mo: I fund 9.2%, S fund 9.1%, C fund 9%, F fund 1.3%, G fund 0.6%
1 mo: C fund 3.8%, S fund 3.5%, I fund 2.9%, G fund 0.3%, F fund -0.5%
2 wk: S fund 3.8%, C fund 3.1%, I fund 2%, G fund 0.2%, F fund 0%
1 wk: S/C fund 2%, I fund 1.5%, F fund 0.2%, G fund 0.1%,

Note that the rise in the USD has weakened the I fund in recent weeks.

TSP Advisory Services Performance YTD thru 5/2

1. Matt's TSP Blog 7.7% (free)
2. TSP Wealth 2.7% (free)
3. TSP Max 2.1% ($100/yr)
4. Maximizing TSP -(1.7)% ($240/yr)
5. TSP Fred -(2.9)% ($162/yr)
6. TSP Key -(5.0)% ($100/yr)
7. Ebbchart -(10.7)% ($162/yr)

TSP Strategy -(3.0)% (free)
_______________________________________________
The following are not as of 5/2

Thrift Trading 4.8% (thru 4/25) ($279/yr)
TSP Go HR -(1.8)% (thru 4/25) (free)
TSP Wire -(4.5)% (thru 4/5) (free)
TSP Advisor -(4.8)% (thru 3/31)($120/yr)
TSP Report -(11.1)% (thru 4/15) ($100/yr)
________________________________________________
The following do not list YTD returns.

TSP Advisory ($55/yr)
TSP Pilot ($150/yr)

Returns for 2005-2007 are in the Files Section of the Forum.

What If I Buy Last Month's Best TSP Fund?

I'm asked that question often, as in, will my TSP returns improve if I do this consistently? Well, think about it for a moment. What would it provide? Clearly, in a trending market with momentum, it should do just fine. It will be counterproductive however in a trendless market. What it really is, IMHO, is a moderate term momentum play.

How would it do? Let's see...

1989

G fund 8.8
F fund 13.9
C fund 31.0
LM fund 21.6

1990
G fund 8.9
F fund 8.0
C fund -3.2
LM fund 3.5

1991
G fund 8.2
F fund 15.8
C fund 30.8
LM fund 11.8

1992
G fund 7.2
F fund 7.2
C fund 7.7
LM fund 0.8

1993
G fund 6.1
F fund 9.5
C fund 10.1
LM fund 4.6

1994
G fund 7.2
F fund -3.0
C fund 1.3
LM fund 1.0

1995
G fund 7.0
F fund 18.3
C fund 37.4
LM fund 26.2

1996
G fund 6.8
F fund 3.7
C fund 22.9
LM fund 24.5

1997
G fund 6.8
F fund 9.6
C fund 33.2
LM fund 10.0

1998
G fund 5.7
F fund 8.7
C fund 28.4
LM fund 28.5

1999
G fund 6.0
F fund -0.9
C fund 21.0
LM fund 9.7

2000
G fund 6.4
F fund 11.7
C fund -9.1
LM fund 1.4

2001
G fund 5.4
F fund 8.6
C fund -11.9
S fund -9.0
I fund -21.9
LM fund 5.2

2002
G fund 5
F fund 10.3
C fund -22.1
S fund -18.1
I fund -16.0
LM fund -1.2

2003
G fund 4.1
F fund 4.1
C fund 28.5
S fund 42.9
I fund 37.9
LM fund 33.6

2004
G fund 4.3
F fund 4.3
C fund 10.8
S fund 18.0
I fund 20.0
LM fund 11.2

2005
G fund 4.5
F fund 2.4
C fund 5.0
S fund 10.5
I fund 13.6
LM fund 5.9

2006
G fund 4.9
F fund 4.4
C fund 15.8
S fund 15.3
I fund 26.3
LM fund 8.3

2007
G fund 4.9
F fund 7.1
C fund 5.5
S fund 5.5
I fund 11.4
LM fund 13.3

1989-2007 Totals
G fund 118.2
F fund 143.7
C fund 243.1
LM fund 219.9

Clearly, you would have done better during the 19 year period from 1989 thru 2007 by staying in the C fund rather than switching to the best fund of the previous month.

2001-2007 Totals
G fund 33.1
F fund 41.2
C fund 31.6
S fund 65.1
I fund 71.3
LM fund 76.3

As seen above, the Last Month (LM) fund tends to help during bear markets but loses money during bull markets. The question is..wouldn't it more productive to simply leave equities during extended bear markets and stay in during extended bull markets? What do you think?

How Well Does the I Fund Track the Benchmark?

When you compare the I fund to three other index mutual funds that are also to track the MSCI EAFE index, it appears that the I fund does a reasonably good job. However, given the lauded TSP low fees, shouldn't it be doing a better job, with less tracking error? I've asterisked the best fund in tracking the EAFE for each year for the past few years. Note that the I fund only came closest to the index in one year.

2002
I fund: -15.98%
Vanguard VDMIX: -15.70%*
EAFE: -15.66%

2003
I fund: 37.94%
Vanguard VDMIX: 38.61%*
EAFE: 39.17%

2004
I fund: 20.00%
Vanguard VDMIX: 20.25%*
Price PIEQX: 19.2%
Fidelity FSIIX: 19.9%
EAFE: 20.70%

2005
I fund: 13.63%
Vanguard VDMIX: 13.34%
Price PIEQX: 13.4%
Fidelity FSIIX: 13.7%*
EAFE: 14.02%

2006
I fund: 26.32%*
Vanguard VDMIX: 26.18%
Price PIEQX:26.3%
Fidelity FSIIX: 26.2%
EAFE: 26.86%

2007
I fund: 11.43%
Vanguard VDMIX: 10.99%
Price PIEQX: 11.8%*
Fidelity FSIIX: 10.7%
EAFE: 11.63%

Will the new limits on the TSP IFTs help to close this tracking error gap? We will see.....