A professional allocation timing service

TSP Smart Investor& Vanguard Smart Investor

small & mid cap index timing results

See our Results Overview page



The Advantage S model provides timing signals for the TSP S fund, the Vanguard VXF ETF or any index fund that tracks the total US stock market minus the S&P 500 index.  These small cap funds exhibit greater seasonal tendencies than the large cap funds making them perfect candidates for our Seasonally-Modified Buy & Hold strategy.


 

 

The results presented above are for our objective model for the US stocks not in the SP500 index - the small cap index tracked by the TSP S fund and Vanguard VXF ETF and a few mutual funds.  It is an excellent candidate for the seasonal strategy we employ providing higher returns than the larger cap SP500 index with broadly diversified fund with over 3000 US companies.


In 2015 based on our bull/bear market indications, we recommended not entering stocks at the start of the favorable season for equities (Oct 2015).  As conditions continued to deteriorate we continued to recommend staying on the sidelines since all of the conditions for a bear market had been met and by our measures became quite precarious by February 2016.  


The global central bankers were obviously seeing the same situation and unleashed unprecedented monetary interventions.  The market rallied starting in February and our signals reversed to positive in April shortly before the favorable season in equities was to end.  We remained on the sidelines until the beginning of the 2016 favorable season when we no longer saw the negative bull/bear signals and followed our models timing signals to re-enter equities.


Our override recommendations added approximately 5% to the small cap fund and subtracted approximately 5% from the larger SP500 signals.  But in both cases avoided significant volatility. For those who followed our recommendation, they missed the large dip seen in the chart in early 2016.  The numbers above reflect returns of our objective seasonal model without deviations.  We only recommend deviations when we see significant indications of market stress.



It is my view we are merely in an extended bull market top due to massive global monetary interventions by the global central banks in an effort to advert a bear market and another financial crisis.  I do not think at these historically high valuations we have entered a new bull market.  At some point, I will once again recommend sitting on the sidelines once indications point to the bear market expresses itself once again.