The above chart compares someone with

A good past performance to someone without a good past performance. But let’s think a little further. Let’s assume that candidate “B” also has some positive performance. In fact, “B” has a character certificate proving that “B” has those good qualities for the past 2 years! Well, not bad, right? But “A” has been demonstrating those qualities for 20 years.

Who would you hire Presumably you would hire

Because they have demonstrated the behavior you are looking for more consistently than “B”, giving you more reason to expect to behave that way. Assuming “A” can change and “B” may improve, it’s all possible. But consistent past performance sets a standard for expected behavior.

The more often we see a certain pattern

the more we can assume that behavior is standard behavior. Once we establish a standard, we don’t just hope that behavior will continue, we expect that gcash phone number behavior to continue. So, what is the standard behavior for your investments? This is where the science of investing starts. Every fund in the TSP has a standard behavior! This is a metric that asset managers (including your TSP manager) study closely. It’s called standard deviation.

special data

How standard deviation works

Every year, the TSP funds perform the same way. They go what is programmatic advertising? up or down (or stay the same). After each year, we measure how much they went up or down and express the change as a percentage (e.g., Fund C was up 16.07% in 2012). We then add that 1-year performance to the total 1-year historical performance of the fund.

So if Fund C has a 26-year history

we can add all the 1-year performances together and divide tg data by 26, and we’ll find the average 1-year performance – which happens to be 9.25%. Once we have calculated the 1-year average, we can investigate how often the fund performs exactly as it does. Guess what? The fund almost never performs exactly as it does! That’s the nature of averages. The fund will always perform better or worse than the average.

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