Professional allocation advice grounded in history not hype

TSP Smart Investor& Vanguard Smart Investor

Russell 2000 small cap index timing results

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The Advantage R model provides timing signals for funds that track small cap indexes based on timing signals from the Russell 2000 index.  My current recommended low cost fund that tracks the Russell 2000 index is the iShares IWM ETF over the Vanguard funds due to the small size of assets in the Vanguard Russell 2000 index funds.

 

 

 

Small cap indexes display greater seasonal tendencies than the large cap indexes as seen by the significantly greater differential in annualized returns of our strategy over buy & hold. The results presented in the data are based on our objective seasonal timing model that uses the Russell 2000 index fund (IWM ETF) to generate optimized signals twice a year to enter and exit.  In the chart, I added an insert to show the effect of my recommendation to sit out the 2015/2016 favorable season.  We re-entered in the fall of 2016 based on the objective timing signals once again.  


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.

 

 

This website provides a commercial service and is not affiliated with the Thrift Savings Plan administration.  Recommendations are based on our best judgment and opinions but no warranty is given or implied.  Past performance does not guarantee future performance or prevent losses.   All readers and subscribers agree to this website's Terms of Use and Investment Disclaimer.   Copyright © 2011-2019 Ravenstone Research Inc.  All Rights Reserved.  

 

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