Why use multiple systems for each TSP Fund?
You would think, at first blush, that you should pick the most successful single system and use that one exclusively to guide your TSP investments. However, no matter how successful any single system may have backtested, there is always that possibility that it may fail in the future, or at least lag behind the performance of other top rated systems. Furthermore, the “insurance policy” derived from using other top rated systems simultaneously is in producing a remarkably smoother performance profile for the investment. By spreading the risk over several top rated systems the investment becomes much less volatile, more reliable and easier to “sleep” with overnight. Diversifying across several top rated systems reduces the maximum draw down (Mdd) of the portfolio as can be seen in these performance figures. TOP While one may lose faith in a single mechanical system over any difficult market cycle, using a portfolio of time tested systems will be more likely to be successful over future m
