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Exposing Long-Term TSP Investors to Risks They Did Not Anticipate

Exposing Long-Term TSP Investors to Risks They Did

Manager
IRS
Thu Mar 13, 2008 9:49 AM

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Why not create a separte TSP Fund for Frequent trader and let them trade as much as they want with a fee attached to it. I can understand their need to make more money, but not at the expense of those who save in the TSP for their retirement. I do not appreciate the fact that these folks are trading constantly and it could bring the value of my TSP account down which I depend on for my retirement.

Re: Exposing Long-Term TSP Investors to Risks They Did

We Need Frequent Trades
Retired Navy
Thu Mar 13, 2008 9:42 PM
Account holders who choose to manage their TSP account make more IFTs. These members decrease the cost to all TSP accounts, not increase the cost. You have been brainwashed by the FRITB into believing that those who choose to manage their TSP accounts increase the cost to all TSP accounts. The reason the costs decrease is the majority of these IFTs are at a loss to those doing the trade. Where does this money go? They either go to the manager (Barclays) or they go into the pockets of all accounts. The TSP records show that fund costs were less in 2007 compared to 2006. These costs have decreased, not increased as claimed by the FRITB.

Re: Exposing Long-Term TSP Investors to Risks They

Pissed Off TSP
Navy
Sat Mar 15, 2008 1:58 PM
"I do not appreciate the fact that these folks are trading constantly and it could bring the value of my TSP account down which I depend on for my retirement."

That is a major overstatement. Using the TSP own inflated and biased numbers frequent trading cost each I fund investor .07 percent for 2007. This would mean that if you invested in the I fund (and the I fund is the only identified as the supposed problem) it would have cost you .07 percent to have the freedom to move your money as you please.

Fuddy Duddies frustrate transfers unnecessarilly

William Donoghue
W. E. Donoghue & Co., Inc.
Thu Mar 13, 2008 9:53 AM

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Is Congress acting responsibly "for the purpose for which it was intended?" I doubt it.

Spending is out of control and TSP investment accounts are at greater risk. Stock and bond markets could soon be in freefall and removing barriers for responsible retirement savers to transfer prudently is the goal, not frustrating the savers.

David Walker, Comptroller General of the Government Accountability Office, recently resigned out of frustration with government spending. Medicare Part D alone doubled the National Debt at the time of its passing.

The financial markets (as reflected by the recent market downturn) are reflecting the disastrous consequences of that overspending. TSP investment accounts must be easy to control.

'Boomers are the best-educated generation in human history. They can make responsible decisions. After all, it is their money, not the directors' money.

TSP directors should get with the program, not be fuddy duddies.

Re: Fuddy Duddies frustrate transfers unnecessarilly

VR Counselor
VA
Thu Mar 13, 2008 12:40 PM
Thank you, for the confidence that I can handle my own money. Most government employees have solid educational backgrounds and are capable of learning how to manage their own TSP accounts. Many of us are not "in it for the long haul" as the TSP Admin. would have you believe. Baby Boomers may not be able to recover from the Buy and Hold strategies being forced upon them during this volatile market. Two trades may be enough some months but certainly not in others. There is something really fishy about this whole cost analysis by TSP, the numbers just don't add up.

Re: Fuddy Duddies frustrate transfers unnecessarilly

General Engineer
Federal Govt
Wed Apr 9, 2008 6:42 AM
'Boomers are the best-educated generation in human history. They can make responsible decisions.'

I appreciate your comments, but I disagree with this one. If you will but read the childish attacks and outright lies (e.g. daytrading the TSP) that are being plastered to this board by those "boomers" who are angry that everyone else isn't losing money like they are you will see that not everyone is capable of making responsible decisions. After all, isn't it irresponsible to attack someone else who makes wiser decisions (and, hence, has superior outcomes) as opposed to endeavoring to improve personal performance?

The TSP board should endeavor to provide on-line tools for each participant to improve themself, and authors of articles such as these here should stop fomenting the preeminence of dark side (self-destructive) behavior.

Market timing?

software engineer
navair
Thu Mar 13, 2008 9:58 AM

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We are constantly told that market timing is not a good idea. This implies that on average moves intended to time the market are in the long run either neutral or negative in effect. THis implies that the effect described in the article, in the long run, would be neutral or positive for us long-term investors.

Re: Market timing?

EE
Spawar
Thu Mar 13, 2008 10:51 AM
Well, Money magazine had an article a few years back surveying the performance of the top 100 mutual funds. Of those 100 funds, only five bested the S&P 500 that year and only one bested the S&P 500 five years straight. So if the professionals can't do that great a job managing other people's money, how can we do any better? Of course, we have a vested interest--it IS our money whereas the professionals make their money off of the fees we pay them, which is much higher than what the TSP charges.

Exposing Long-Term TSP Investors to Risks They Did

Computer Specialist
Farm Service Agency
Thu Mar 13, 2008 9:59 AM

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When a few investors are affecting the earnings of the majority then it is time to take action. I applaud the action of the TSP management for taking a rapid and postive step to protect the majority of the TSP investors.

Re: Exposing Long-Term TSP Investors to Risks They Did

Aero Engineer
DOD
Sun Mar 16, 2008 3:57 PM
I appriciate your conviction to stay in the market no matter what. Any losses that result from TSP particapants that watch the markets is measured in pennies a year. Losses that you have experienced by not managing your retirement funds is measured in thousands of dollars. Since 1999 the S&P 500 has lost money for stay in the market no matter what guys. The TSP board is not doing any of us any favors with this change.

Long-Term TSP Investors Unanticipated Risks

TELECOMM SPECIALISTS
FEMA
Thu Mar 13, 2008 10:08 AM

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Isn't it interesting that the TSP folks get so worked up over a few trying to move their move to avoid shortfalls, when the cost on a per person basis is not terribly significant. On the other hand I believe Exposure to Risks we didn't anticipate, i.e., the sub-prime mess are more important to the average TSP investor, particularly since it appears to have started the drop in the market since last October. How do we cope with people who purchase houses they know are unafordable. How do we copy with companies that may have duped buyers.
Did the TSP funds invest in stocks/funds that participated in all the various gee-whiz mortgages companies and packages. If they were watching this situation, it would seem that they should have picked up on the problem and lightened their problem children to minimize "Investor Risks." Do we need some sort of insurance to cover such cases of fraud, etc in the marketplace??

Re: Long-Term TSP Investors Unanticipated Risks

software engineer
navair
Fri Mar 14, 2008 9:21 AM
The TSP stock funds are indexed funds. Individual stocks are not bought and sold. When are we going to start seeing indictments of the slime that were pepetrating the fraudulent loan transcations?

TSP risks assessment

Equal Opportunity Specialist
Department of Housing and Urban Development
Thu Mar 13, 2008 10:09 AM

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I believe that if we had better money managers, then people would not feel a need to try to become dat traders. Because TSP is part of the retirement program for FERS employees, theey depend heavily on seeing a pattern of growth for their savings. With concerns about social security which is a part of the FERS retirement strategy, people are uneasy about loosing large sums of their savings in a short period of time. I believe the TSP should have a mechanism for alerting the people when they are at greater risks with some of their savings strategies. I aslo believe that people that invested in the Life funds have been dissapointed with the earnings derived from these funds. The message I got was that the Life funds would be safer and gard against huge losses, but see better gains overall.

Re: TSP risks assessment

IT Spec
dod
Thu Mar 13, 2008 11:28 AM
EO Specialist, two points.

First, one of the main advantages of the TSP is low cost. The money management help you're asking for is going to drive up costs significantly.

Second, lifecycle funds can only be accurately judged over the long term(several years). They haven't been around that long yet.

Limiting tsp transfers

Transp Oper. Spec GM-13
GSA- Retired
Thu Mar 13, 2008 10:10 AM

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It is MY money and only a minute percentage of tsp participants transfer regularly. The tsp board has ALREADY restricted us over two months ago. This irks me !

Re: Limiting tsp transfers

agent
IRS
Fri Mar 28, 2008 10:17 AM
TOUGH. We dont want you day traders taking our money.

Re: Limiting tsp transfers

Still Working
DoD
Fri Mar 28, 2008 12:10 PM
You have every right to control you money, but you rights end when you actions cost me and other TSP holders addtional fees which result from your trading actions.

Why not set-up an account with a online brokerage firm and trade away.
Total Comments: 109
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