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Winners and Losers: Frequent TSP Trading, Balancing LifeCycle Funds and Money

Right on Target

Environmental Scientist
Air Force
Fri Nov 30, 2007 9:40 AM

Post Reply

Great article! You are right on target - the vast majority of us who are not day traders should not have to foot the bill to pay for the egomaniacs who think they can time the markets and make a killing. Let them play their games with own money, and stop reducing the rate of return for the rest of us!

Re: Right on Target

Investigator
Dept. of Labor
Fri Nov 30, 2007 9:51 AM
I agree. Let the gamblers pay for their own addiction.

Quit Trading!!

Fin Sys Spec
DFAS-IN
Fri Nov 30, 2007 9:46 AM

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What I don't understand is why are people day trading their long term retirement investment funds. If you want to play with the stock market put less into TSP and use that money to play in the stock market without reducing my retirement investment!!

This is a long term investment portfolio. Didn't any pay attention to General Business and/or Economics classes in school.

Please everyone start using this Plan for what it is long term investment.

Re: Quit Trading!!

national rep
DoD
Fri Nov 30, 2007 11:39 AM
You don't understand why they dont use the stock market its because of the fees and peek a boo affect you get instead of straight risk with stocks. You can get a good idea of what the I fund and s will be in TSP for the next day.

Re: Quit Trading!!

Immigration Enforcement Agent
Immigration & Customs Enforcement
Fri Nov 30, 2007 5:39 PM
The reason people like me move funds around frequently, is because we want to build up our retirement funds. Our retirement system relies too much on Social Security, which I believe will not be there when I retire. I have twenty years to go until my mandatory retirement age (I'm 6c covered), and I want to maximize my retirement.

There are other ways to deal with this issue than limiting the number of trades per month. For example, one of the biggest problems with the I fund is the Fair Valuation. The TSP Managers right now have to guess what the price will be at the closing of the overseas markets, which doesn't happen until well after the closing of the US Market. Lately, the market has been too volatile, and the Managers are guessing wrong, which drives up costs. Why don't they simply show the price the next morning, when all of the markets have closed for the day?

Oh, we are not day traders. We are active traders! There is a BIG difference!

TSP G Fund

Investigator
Dept. of Labor
Fri Nov 30, 2007 9:55 AM

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Since the return on the G Fund is based upon the number of shares (approximately a penny a week) a participant holds, and not the dollar amount in his/her account, there is no compounding of interest. The longer a participant holds funds in the G Fund, the more money he/she loses in lost earnings. No interest on interest. Who gets this lost interest? The way the TSP is run is costing its participants millions. And these are the same people that want to place restrictions on trades? It is time to revamp the G Fund and treat it like all other money market accounts where the value per share stays at $1.00 and earnings allocated as shares in the Fund.

Re: TSP G Fund

Boiler Guy
Dept. of Veterans Affairs
Fri Nov 30, 2007 10:38 AM
This must be implemented if they are going to restrict us from moving our money around. The G Fund is a money market account, so for those who like to keep their money in a tin can, then its cool with me if they want to start this. I have been in the G Fund the last two days, but the two days before I was in at 100%, made a quick $4000.00. I am now safely in the money market waiting for my penny.

Re: TSP G Fund

Investigator A
Dept. of Labor
Fri Nov 30, 2007 10:43 AM
G Fund shares cost me $10.00 in June, 2003. They are now worth $12.23. That $2.23 is interest - my investment has appreciated 22.3% in just under 4 1/2 years. For something totally safe that's not bad. The fact is the TSP is earning it's participants millions. And it is retirement money, not gambling money. Frequent trading should absolutely be restricted!

Re: TSP G Fund

Investigator
Dept. of Labor
Fri Nov 30, 2007 10:47 AM
There are two articles posted within minutes from "Investigator Dept. of Labor". The articles are from two separate and distinct authors, with obviously opposing viewpoints.

Made Extra 28% Trading Between S & F Funds...

Health System Specialist
Department of Veteran Affairs...
Fri Nov 30, 2007 10:00 AM

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I am not a daytrader but currently place 2-3 round trip trades per month between the S & F funds. The S Fund is up 20% since July 2006. I am up over 48% during the same period trading between S & F funds (Send me a message if you would like a spreadsheet showing my trade signals). I have spent much time backtesting my timing strategy all the way back to 2000 (start of worse bear market in years) and every year my trading signals have significantly outperformed the market. Let's hope the TSP board adopts a fair strategy for people like me who are actually trying to cushion their otherwise petty FERS retirement.

Re: Made Extra 28% Trading Between S & F Funds...

Appeals Officer
IRS
Fri Nov 30, 2007 1:04 PM
I am replying to the commentor who stated that he would send his trading signals to whoever sent him a message requesting the spreadsheet. I would like to get the spreadsheet and appreciate your willingness to share it.

Send by email to Jack.R.Ellis@irs.gov

Thanks.

daytrading of tsp funds

realty specialist
Bureau of Land Managment
Fri Nov 30, 2007 10:04 AM

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"daytrading" is not a good term for the point of your article...typically it means buying or selling short (typically in the morning) and then exiting the position before the market(s) close in the afternoon.
i typically don't movein/out of the tsp fund, generally your points are valid, however 2-3 times a year there it does make sense to exit and re enter later.
there has been discussion about limiting the # of movements one can make in a given month..i would like this to apply to the entire year instead. so if the current proposal is 2 per month for example, i would like it to be 24 times a year instead. this would fit my needs. i may want to do 4 movements in one month, unlikely i would ever use all 24 in a year

as to people who move in and out a lot, my answer is they need to go do this with a brokerage (who are set up and have designed software to do it efficiently), there are some that charge as low as $6-10 a trade (roundtrip).

TSP Life Cyle Funds

Technical Expert
SSA
Fri Nov 30, 2007 10:05 AM

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I participate in the Life Cycle funds because I do not want to be distracted by the ups and downs of the stock market, nor do I think that I am knowledgeable enough to make these investments.

I am concerned, however, that those who trade frequently are causing less of a return to my overall investment because of the costs of their actions affecting the money available for investment by the TSP.

Frequent traders should foot their own bill for the trades beyond the allotted number per month.

Thank you for article

retired
USPS
Fri Nov 30, 2007 10:07 AM

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This article explained alot and was beneficial to me. The TSP is important as it is my retirement money -- I don't want to gamble with it -- I don't want to worry about it. I want to make money though and protect my account. The daily trading is exhausting and stressful, and I don't need that. Your article explained that getting on the bandwagon (trading I fund) is not the way for me to go. thank you.

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