Getting defensive

This morning I placed an interfund transfer request in my TSP account.  This is a discretionary override of my systematic TSP strategy.  I changed allocations to 25% C 75% G funds for my existing balance. I will keep a 40% C 60% G fund allocation for new biweekly contributions.

I’m getting more and more bearish for the rest of the year.  What does this mean? Probably that the market is about to soar and you should load up on stocks. Well, maybe not…

We’re pretty far above the 200 day average and near all time highs and in a very mature bull market.  I could be wrong but am playing it safe(r) here.

The allocation displayed in the top right of the site will continue to reflect the 40/60 allocation until an official strategy change occurs.

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On a side note,  XIV daily mean reversion (long only) has continued to crush daily follow through since my March post. I’ve been keeping an eye on it and playing it occasionally.  I’m sure it will stop working eventually but am enjoying it (in small sizes) while it lasts. 

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On another side note, my life has been pretty hectic recently and I haven’t been able to do much of the market research I love.  I’m hoping things will calm down by the summer.

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Posted on April 23, 2013, in Other, TSP. Bookmark the permalink. 12 Comments.

  1. Thanks for the heads up, Dan. For what it’s worth, I think your move was a great one. I made an interfund transfer and contribution allocation change a couple weeks ago to 20% C and 80% G.

  2. I look forward to your market research when you find time to do it.

  3. “What does this mean? Probably that the market is about to soar and you should load up on stocks.”

    Good call, Mike.

    I religiously track all the trades I _don’t_ take based on discretionary decisions…seeing how much money I’ve thrown away helps me trust my modeling skills more than my intuition.

    • That is a very good idea to track those discretionary trade ideas (taken or not). I sometimes jokingly consider taking a Costanza approach – to trade the opposite of whatever my intuition is telling me.

  4. Hope you’re having a good summer, Mike.

    Looking forward to reading your ideas when you decide to resume blogging.

    • Thanks Alex, hope you’re having a good summer too!

      I’ve been busy buying a place/ selling our old place and taking care of a pregnant wife. Baby girl due to arrive in November! Still in the markets and hope to post some more ideas soon. I’ve continued to play XIV daily mean reversion here and there while it still works. Also continuing to try more discretionary trades with some success.

      Take care,
      Mike

  5. Hi Mike,
    How many average trades per year do you have in TSP Strategy in the last 50 years.
    Many thanks for your reply.

    Brds.
    Luis

    • Hi Luis, the strategy averaged about 1 allocation change a year with a range of 0 to 3 changes in any given year. It’s possible for the strategy to go years without an allocation change if there are no serious corrections.

  6. Hi Mike,
    I recently found your website here and I’m very impressed with the technical approach and the data you have presented.
    I’ve read the 3 TSP Strategy rules and I think I understand them clearly, but just to be certain of that could you tell me the last two dates that the strategy changed, and what the actual calculations were on those 2 dates? Also, what are the current two up and down indicators which would signify your next bull or bear move, and where on the web can I track and calculate that data myself real time? Lastly, did the move from 40/60 to 25/70 occur using a particular set of rules? While I understand your website and tried and true strategies and rules, the simple act of making your last move to 25/75 (unfortunately) encourages someone like myself to second-guess the system…which I don’t view as a good thing.
    Thank You, Bob Emerson

  7. Sorry, I meant 25/75 in both cases, not 25/70. Change my post to 25/75 if you want to.
    Bob

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