The TSP Pilot Portfolios nearly double the investment return of what would normally be an aggressive TSP fund portfolio, heavily invested in the stock funds such as the C fund, while reducing the risk and market exposure to the level of an investor almost entirely in bond funds!
TSP Pilot subscribers reap the reward of an aggressive TSP investor with the lowered risk profile of a safety-conscious bond investor. The ONLY way to effectively shift the entire risk-reward investment horizon is by applying effective fund timing. That is essentially what TSP Pilot is all about.
Effective fund timing may not add much to a roaring bull market, but it is almost always a major reducer of market risk. Market timing might even slightly underperform buy-and-hold during protracted bull markets such as the period 1991-March 2000. Unfortunately, you must be a fund-timer to recognize those periods! Since market timing will never buy bottoms nor sell tops, there will always be some pain to suffer in bear markets employing either investment strategy.
However, at the end of the day you'll have a higher return, and you will have accepted significantly less market risk in the process.
Effective fund timing limits that pain by reducing the risk of being in the wrong market at the wrong time. It is that resultant reduction in risk from market timing that allows more of the profits from the major bull markets to be banked. When the stock market keeps climbing and climbing during a bull phase, fund timing not only adds little additional return but probably costs a bit in whip-saws.
Effective market timing shows its superiority when bull markets top out and reverse to the downside, such as in 1973-74 when major stock markets fell by 40%, or the 20% fall in 1982, or the nearly 50% decline in three consecutive years from March of 2000.
During those patience shattering down markets, fund timing systems allow you to bank your profits early by moving allocations into the conservative bond funds while you await the next bull market with your account fully intact. In the meantime those wedded to buy-and-hold are left holding the remnants of their destroyed portfolios as prices continue to plunge.
Most fund timers who fail will base their decisions on prediction models, emotional highs and lows and other rational inconsistencies. In fact prediction models of stock market behavior simply don't work.
While you can't "predict" the future price of any stock or fund, you can successfully follow the market's trend. As the old saying goes, "the trend is your friend."
TSP Pilot uses an objective series of technical trend following fund timing and fund selection systems, optimized over years of past history with effective "walk-forward" testing, to custom fit each of the five TSP funds individually. The TSP Pilot portfolio advisories are based strictly on time-tested mechanical trend following systems optimized for each TSP fund. Since we provide a basic description the TSP Pilot Systems, the Pilot system can not be considered a "black-box." However, our system details are the proprietary result of many years of intensive research, and we will never disclose them in their entirety.
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