TSP 2 Timing System

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This page presents the trade results graph and trade table of the TSP Timing System 2. This system is designed for use by federal employees to allocate funds within the Thrift Savings Plan, available to federal employees and military members.

How the TSP 2 System Works

The TSP 2 system switches between two of the available TSP funds - the I Fund (international equities) and the F Fund (US bonds).

It has been constructed based on the observation that the stock markets, both domestic and international, tends to rise near the end of each calendar month and that significant drops, if any, seem to occur soon after the beginning of the month.

The system takes advantage of these cyclical trends based on monthly periods and mechanically switches out of stocks soon after the beginning of each month and back into equities around the middle of the month.

There are a number of theories as to why monthly systems such as this have worked in the past and why they may continue to be successful. Chief among these is the fact that institutional investors, including large pension funds, tend to have large sums that they must invest near the end of each calendar month. This influx of cash may be enough to drive prices up with these monthly cycles being the result.

This system was first published on the web on March 24, 2008, and was developed by us into its current form in February, 2008.

The system is a daily system because on each month the trades may occur on various days of the week due to the variables associated with the number of trading days in each month.

The graph below presents the system's back tested and real time results compared to buying 50% of each fund at the beginning of the period and holding until the end of the period.

TSP 2 Timing System Graph

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