Gene Shuman State Department Mon Nov 26, 2007 9:49 AM
Perhaps the TSP should allow some small number of free transfers, perhaps two per month (exact amount TBD), but deduct the transaction cost from the transferee's account for any above that. One reason the "daily traders" are making money in the TSP is that all transfers are "free", although the transfer cost is apparently shared by all participants. Make the frequent traders pay full freight so the rest of us don't have to pay for their activity and fund their gains.
Re: Market timing and Your TSP
CR SSA Wed Nov 28, 2007 5:09 PM
I agree completely. Let everyone make as many trades as they want but after 2 a month the trading costs are deducted from their account.
Diversity for FRTIB
Manager USDA Mon Nov 26, 2007 10:05 AM
It appears to me that the will of the participants has not been heard. When I look over the Credentials of the TSP board we do not have employee representation. I do not recall ever getting a ballot or any other device to choose the board or the director of our thrift savings or hire the Executive Director. When I look at the Make up of the board it doesn't appear to be very diverse either with names like (Andrew Saul, Thomas Fink, Gordon Whiting, Alejandro Sanchez, Terrrance Duffy and Our Executive Director Mr. Gregory Long. If you feel like we need a recall election Let Fed Smith know your concerns. If you feel like employees should have a voice on this board then lets see about opening up the board to 4 additional seats for employees and the Executive director is not the dictator. I feel like we need representation on this board. If you feel the same Lets Do the RECALL. Let your voice be heard in the board room of FRTIB. LET FREEDOM RING
Re: Diversity for FRTIB
Financial Analy$t USAF Mon Nov 26, 2007 11:16 AM
When it comes to my money, I prefer credentials and performance in the selection of an advisery board and not the PC line. I am sure there are funds out there whose managers are selected by the color of their skin and not thier achievements.
Re: Diversity for FRTIB
Manager USDA Mon Nov 26, 2007 5:03 PM
But I bet you didn't choose the board or have any input into their selection of the current board did you USAF Analy$t ????????
I didn't write any comments. but...
Engineer FAA Mon Nov 26, 2007 10:08 AM
I made a considerable amount last spring (almost $10k trading around $60k of funds) for a two month period. That's a 100% annual return had I continued.
This is vs. the 10% or so if I "let it ride".
I doubt my numbers would have been that high if I continued the entire year, but they would have been more substantial than doing nothing.
The bottom line is, if you are willing to put enough time each night watching overseas markets (I did it all via trades from the I fund to the C fund and back), you can do very well.
Trading in some of your sleep, along with all your free time wasn't something I care to do full time. I was just proving to others that it can be done, and be done well.
Bottom line, if folks are willing to risk their own money, let them do it. Charge a fee for each trade over once a month. The money to be made will easily pay for that fee.
Re: I didn't write any comments. but...
Deportation Assistant ICE Mon Nov 26, 2007 10:38 AM
Totally agree with you. I, too, researched the international markets/stocks prior to and after US markets closed/opened, and lowered my risk when trading in and out of the I Fund. My total trades for 2007 were 14, seven in, seven out, of the I Fund, profiting substantially more than a hold position in the I Fund. I'm parked right now. While I agree that emotional trading will increase the risk of losing money in TSP Funds, there's always going to be a small percentage of investors in the TSP who can minimize the risk with specific strategies rather than emotions run amuk.
Re: I didn't write any comments. but...
Investigator FDA Mon Nov 26, 2007 12:57 PM
Another good comment, two free trades per month. Then if one wants to trade more frequently, that individual pays the fee, not everyone else. That way expenses are kept to a minimum and those that want to day-trade pay the price. Thousands of investors should not have to pay for the actions of the few. If you enjoy your commissions spread across all fund holders, instead of paying for yourself, you must also enjoy paying increased health care premiums in order to cover the health care costs of the uninsured or illegal immigrants—same principles apply there.
Frequent trading
Investigator Dept. of Labor Mon Nov 26, 2007 10:09 AM
Out of the 3,000 or so frequent traders I'm sure there are at least 10 or 15 who consistently make money doing so. Although these individuals can provide us with great anecdotal information concerning their trading acumen, all they are really revealing is their ignorance. Studies show that even these people will eventually fall back to the average and likely even below. Those that feel otherwise should quit the government and take up day trading -- they should be able to retire in no time. If making money in stocks is so easy, why do stockbrokers advertise? They should keep quiet, make their fortune and retire. But because these frequent traders are costing the rest of us money, restrictions are necessary.
Re: Frequent trading
Investigator FDA Mon Nov 26, 2007 12:51 PM
I agree and thought the same thing. If someone has an algorithm that would help others make money on the TSP, that individual should quite their mediocre government job and do infomercials at 2:00 in the morning along with Tony Robbins and that crazy guy with the question mark jacket. There must be more substantial money to be made on selling products then day trading on a 401k could ever make!
Re: Frequent trading
Engineer FAA Mon Nov 26, 2007 2:47 PM
It's not a case of only a handful of individuals making money, it's a case of working very for the money you make in this manner.
Yes, I can make more day trading, if I choose to dedicate 20 hours of each day to it. I prefer to dabble in the market instead, have plenty of family time, and continue with Engineering (which I chose decades ago).
Anybody can make money. There's no secret, or magic to it. But it's a case of "Will spending all your waking hours, eating asprin and tums by the case, and ignoring everything around you make you happy?"
Even if you make a million dollars doing this, the time lost with family for the 2-5 years trading was more than I could afford, or cared to afford.
But don't discount what a little knowledge can do. Some simple correlations with overseas markets, a few simple charts and extrapolations, and anybody can do better with their TSP.
We don't, because we choose to spend out time doing other things.
TSP Restriction Benefit will go to court ! ! !
Statistician DOD Mon Nov 26, 2007 10:09 AM
What a stupit closing !
" While a more restrictive policy will not benefit some participants, it is likely to produce better returns for the majority of TSP participants who do not trade on a regular basis. "
Do you realize the half million participants on all the five L - Funds are the ones causing the increase on the fund management cost ?
Re: TSP Restriction Benefit will go to court ! ! !
manager DoD Mon Nov 26, 2007 10:22 AM
I think if you look at the report from the TSP, you will see that the L Fund is not the problem.
The L fund rebalances as one large fund--not several thousand individual trades in the most expensive fund (for the reasons given in the report).
No doubt, some who like to trade want everyone else to pay for their gambling problem. Most of us just want to have a good retirement system and the tSP is apparently trying to protect us.
Re: TSP Restriction Benefit will go to court ! ! !
Citizen USA Mon Nov 26, 2007 11:38 AM
manager, you might want to rethink your "gambling problem" comment.. It is true that for most people an intelligent buy and hold allocation will produce the best long term results. However.. there are a few people who get good returns by switching funds more frequently based on economic trends (difficult but it can be done). To accuse those people of having a gambling problem is uncalled for.
Re: TSP Restriction Benefit will go to court ! ! !
DUSM DOJ Mon Nov 26, 2007 4:45 PM
Hey manager!!! How do you think the I fund is bought and sold each day? That's right, just like the L funds -- in one package deal. Get educated before you speak else you will reveal your true ignorance. Makes me wonder why you are the manager and the person you responded to is just a statistician in the DoD.... Yep, you guys promote incompetence as well.
Market Timing
SIO US Army Mon Nov 26, 2007 10:21 AM
A compromise on this issue might be to create separate categories of investment options. On category would represent buy and hold, with the current cost structure, and the other category market timing, with an approbpriately higher cost structure.
Then anyone who expects to be able to time the market could try to do so, and pay the price for such behavior, rather than spreading the cost to those who do not engage in frequent trading. Each participant could get an individualized approach to TSP, without unfairly sharing the burden of personal activity across all share holders.
There could even be tiers of activity, with appropriately structured costs. In fact, the tiers could help the fund managers anticipate the level of activity in a fund, which in itself would keep the costs down for all participants.
Re: Market Timing
General Engineer DOT Tue Nov 27, 2007 9:48 AM
I think this sounds good in theory, but will not work. The management costs of such a system would be quite high and it would probably take a considerable amount of time to develop such a system. Furthermore, because we are one large pool of investors helps to keep costs down. The best solution is to charge a fee for excessive use. Excessive would need to be defined and I've heard more than 2 per month thrown out. Perhaps it should be more like 3 or 4 and beyond that would trigger a fee.
Cramer's (CNBC) take on buy and hold:
Manager Labor Mon Nov 26, 2007 10:36 AM
...If anything, buy and hold is a completely reckless and irresponsible strategy. This is why I have always preached "buy and homework." There's nothing wrong with buying a stock with the intention of owning it for years, as long as you're willing to check up on that stock every week to make sure that your thesis for owning it hasn't fallen apart. Too often people regard buy and hold as a license to pay no attention to their investments and hide their heads in the sand when things turn sour...
Re: Cramer's (CNBC) take on buy and hold:
Citizen USA Mon Nov 26, 2007 2:51 PM
This excerpt indicates that the context of Cramers viewpoint is in buying and selling individual stocks. If you are in that environment then yes, Cramer is right. However TSP investors are not in that environment.
The context of the TSP indexed based funds that hold hundreds if not thousands of stocks, the proportion of any one company’s proportion in a fund in mathematically determined and maintained by the index. In this environment it’s possible to make good long term returns with an intelligent buy and hold allocation, it’s also possible(although more difficult) to make good long term returns with a market timing strategy. The assertion that one of these approaches is completely reckless and irresponsible in the context of the TSP is wrong.
Re: Cramer's (CNBC) take on buy and hold:
Investigator FDA Tue Nov 27, 2007 9:30 AM
The first thing I thought of when I read your post was you are exactly correct--when it comes to owning stocks; there you buy low and sell high. That is how you make your money in stocks (minus the commissions and taxes you pay on your trades).
However, the TSP is a fund-based system where you don't have to do the trading; it is already done for you by asset managers. A mutual fund (a.k.a., what the TSP is) is designed for greater ability to diversify your money amongst multiple stocks/sectors. No one in their right mind goes to E-Trade to purchase mutual funds for day-trading. ou won't make the kind of money in mutual funds that you would in stocks, plain and simple. For those who think they can time, and beat, the market, dabble in stocks instead. By trying to work the TSP you are just proving you have no idea what you are doing.
As for your Cramerism, I think you had better listen a bit closer and note if he is talking stocks or mutual funds.
MUTUAL FUNDS ARE NOT STOCKS!
Freedom and Responsibility within the TSP
Financial Mgmt. Analyst / Instructor DOJ Mon Nov 26, 2007 10:38 AM
A LOT of people have opinions concerning investing! Peoples opinions are not paramount to MY TSP Account, because it is MY TSP Account.
A Basic concept of the TSP is the Freedom for "Participant Involvement." The TSP is not a defined benefit plan. It was created knowing there had to be Participant Involvement. Mr. Smith says "keeping the TSP true to its original intent" will likely save federal employees a great deal of their retirement money. Well, who is responsible in this type of program? Is it the Government or is it the individual?
One point I would attempt to make here is that the individuals actively participating in their retirement program may well be the ones most informed and comfortable with their actions. Yes, the TSP goes a long way to "protect us from ourselves." But the Gov't did not assume total responsibility in this program. The Gov't indicated we had freedom to fully participate.
So, please be cautious indicting those participating most.
Timing the markets
Manager FAA Mon Nov 26, 2007 10:41 AM
If people want to make frequent trades and think they can make money that way, then congratualations but let them find a new career in hedge fund trading. I work for the Fedral Government, don't have the time nor the inclination to trade my TSP funds on a daily basis, and would rather see steady, gradual returns increase my TSP balance over the long haul. And I believe in keeping those TSP expenses very low, since this is a key factor in saving our money for all of us!
TSP transactions
Fed DoD Mon Nov 26, 2007 10:53 AM
If folks want to transact daily, there are plenty of avenues to do that other than the TSP. I agree with the limitations on transactions. If you can't stay the course with one or two transactions a month, you're in the wrong vehicle.
Frequent Trading of TSP shares
Personnel Security Officer DOI - Bureau of Reclamation Mon Nov 26, 2007 11:02 AM
Both extreme points of view have their merit, as well as ones in between.
Since those who wish to buy and hold will possibly earn less in the long run (likely debatable), the "buyers and holders" should not be penalized buy the added costs of those who wish to trade more frequently (market timers, etc.) However, the "frequent trading" crowd (some more frequent than others) should not have their capacity minimized for doing what they believe is right for their retirement future.
A compromise (exact specifications to be worked out by the powers that be) could have a certain number of annual trades allowed for each partcipant with little or no cost charged to the individual account (say somewhere between (12 and 24). For more frequent traders, a cost tacked on as a % of the real-time value of an individual trade would be charge to the individual trader's account on an escalating scale (# of trades/year) upwards (i.e., 35 - 36, 37 - 48, etc.)
Possibly, the best of both worlds !
Re: Frequent Trading of TSP shares
Managment Analyst USAG Tue Nov 27, 2007 10:52 AM
I agree. There is a compromise. Unfortunately, it seems that a lot of postings seem to go to one extreme or the other. I fall into the buy and hold category. I don't care if others trade and sell as long as it doesn't affect my account. In the current scenario it does. The costs for excess training is spread among all TSP investors. If people are really making so much money day trading, it will still be worth it for them even if they have to pay a small fee.
Frequent Trading
IT USDA Mon Nov 26, 2007 11:07 AM
Folks (experts) that want to trade frequently should/can do so using stocks, not the TSP.
Frequent Trades in the TSP
MR. Mark USA Mon Nov 26, 2007 11:10 AM
I'm glad people are making money buy trading so they can pay for their trades with some of their profits and not have me pay for their trades with mine.
Day trading
Accountant Treasury Mon Nov 26, 2007 11:12 AM
The TSP was set up for long term investing purposes as part of FERS employee's retirement package. In fact, all mutual fund companies have restrictions on day traders because their trades force the funds to buy & sell securities and generate fees for all of us vs just those who trade. Thus, either the TSP needs to restrict trading (to protect the many from the fees generated by the few) or they must force the day traders to pay all fees they generate. I suspect that if the few day traders had to incur the costs of their trades, that alone would deter their trades. Why should the many pay the fees of the few?
Trades
Scientist NIH Mon Nov 26, 2007 11:25 AM
If all of these day traders are so successful then a relatively small additional fee ($10-15/trade) to make all of these trades should not even be noticed. They will still make boat loads of money and the rest of us won't have to subsidize their trades.
I also remember similar bragging from colleagues who day traded just before the NASDAQ dropped from over 5000 to under 2000. I seem to remember hearing many stories of retirements postponed or having retirees having to go back to work after losing almost everything.
Remember the Beardstown Ladies' Investment Club? Where are they now?
TSP Traders
Special Projects Coordinator USDA Rural Development Mon Nov 26, 2007 11:37 AM
I don't have any problem with people trading their TSP shares trying to make a profit as "day traders", I just don't want to subsidize their activities. Their trades cost me a "non-trader" money. I have a suggestion for a simple solution: The day traders could pull their investments out of the TSP and set up their own portfolios that reflect the stocks in the various TSP funds. They could then make day trades to their own delight at no cost to me.
They might complain about the costs of trading in this way, but oh well, that would be the true cost instead of me subsidizing their activities.
If this is too radical then I suggest allowing one or two trades per month free of charfge, then charging a fee for additional trades so that all costs are paid by the trader.
Sort of like ATM fees.
transaction costs of frequent TSP trading
victoria usdoj Mon Nov 26, 2007 11:40 AM
People who trade should bear the cost of same. There is no free lunch.
Set Limits on TSP Day Trading
Accountant OPM Mon Nov 26, 2007 11:54 AM
I am in favor of setting some limits on the "day trading" frenzy because all members of the TSP funds are penalized for the cost these traders create. I think the individuals who find it fascinating and profiting to day trade should open a separate account for that purpose and be responsible for their own cost of operation. Every time there is a weakness in the TSP or some individuals find a way to exploit the system, there need to be regulations put in place to protect the less fortunate. The other option is to let those that want to day trade their TSP funds join a special pool where the cost can be attributed to them alone. Those of us not involve in day trading should not have to share in the cost of managing these transactions. Set the limits and set them fast.
Day Trading on TSP
Investigator FDA Mon Nov 26, 2007 12:06 PM
For years I have heard both schools of thought on this argument and find day-trading on a 401k absurd. Maybe there are a FEW success stories, but overall at what cost? If you want to claim success, do NOT look at the bottom line of a 5-day or 1-year period, instead look at the life of the TSP. Readers said they “made” money, but profit is not realized until you sell. Maybe for a 1-year period you made money, but what if you slipped once or twice over the life of your TSP, those who made $5 million in 5 days may have lost $10 million over 10 days two years ago. What you are really doing is using a retirement vehicle for day trading. If you want to day trade, join E-Trade or Ameritrade and pay the commissions up front. Overall, the brilliance some readers are claiming is hurting others. It is easy in the market to play with numbers and show positive returns. To be realistic and boastful post negative returns or final returns WITH commission!? No jealousy here, just confusion and disdain.
TSP Restrictions
RLA US Forest Service Mon Nov 26, 2007 12:26 PM
Those who trade on a frequent basis are obviously opposed to restrictions. And why? They can trade at the expense of all TSP participants. TSP was set up for a specific purpose and frequent trading was not part of it. Restrictions should be in place to limit trading to what is reasonable (obviously there's the dilemma of defining "reasonable"); those who want to trade more frequently are welcome to do so...but they would have to pay for it. Why should all of us chip in for others' steak dinner if we're having a caesar salad?
Pay Raiders
Contract Specialist VA Mon Nov 26, 2007 12:28 PM
Charge extra for "day traders." I agree with one respondent who doesn't feel those who "hold" their investments for the long haul should pay for those who "gamble" (frequently trade). What I'd like to know while I sit at my desk eating my lunch and of course, reading this article, what job allows government employees that much time to trade like this? I for one work for my salary and have no time for a 2nd job as a day trader. Maybe mgmt. should watch "pay raiders" a bit more and speculate how some government employees earn their salaries if those employess have so much time analyzing, watching the stock market and trading thier TSP investment(s). Just a thought.
leave it to the PROFESSIONALS
IT SPECIALIST SSA Mon Nov 26, 2007 12:30 PM
Why don't these "day traders" LEAVE IT TO THE PROFESSIONALS!!! or else pass on the total cost of trading to this "small" group to pay all by themselves!!!
Market Timing and Your TSP
HR Specialist DHS Mon Nov 26, 2007 12:36 PM
If the TSP day traders want to do it, let them - Just charge them an appropriate administrative fee to cover the added cost.
TSP trading
Equal Employment Manager DOI Mon Nov 26, 2007 12:47 PM
I support limits on the number of free trades available to TSP participants. Yes, I have made a great deal of money via TSP investing. I'm glad others have, also. However, none of us should be subsidizing those who would make frequent trades in their (typically vain) efforts to beat the market.
Time is the key
Contracting Specialist USAF Mon Nov 26, 2007 12:50 PM
I'm quite experienced day trading & have only been invested in the TSP Program for a little over 1 year. I have grown my acc. from $0 to over $30,000 (100%) with max Tax deposit allowed in that time due to my exploitation and knowledge of how the market moves. Time IS my most critical concern since I plan to retire in less than 3 more years (military deposit = 17yrs + 8yrs = 25 Civil Service retirement yrs. Take away my ability to trade my account when market moves warrant then I'm being penalized for my inablity to have the long term investment this program keeps harping on. For those of use in Gov't Service without the advantage of waiting 20, 30, 40 years for our return on Investment (ROI) we are being penalized greatly. The only advantage to this program for a short term investor is the matching funds contributed by the Gov't and my ability to manage my own account. Take away the later, then there is no advantage so I will transfer & manage my account when I leave Gov't service. RO
Re: Time is the key
Investigator FDA Tue Nov 27, 2007 9:45 AM
I feel for you, but I do not think it is right that ALL TSP investors should pay for your inability to have saved for your future retirement. If you need money fast, do it in a vehicle that makes money fast. Besides, risky investments 3 years prior to retirement are a good way to lose all of your money and remain an indentured servant. All it takes is one mistake or misread of the market.
Re: Time is the key
Retired Guy Retired - USFS Thu Dec 6, 2007 4:29 PM
How exactly do you think you are being penalized? If you came in late in the game, and cannot Day Trade it does not necessarily mean you are being penalized. Just may need to look elsewhere to do your day trading. If you do not have the 20-40 years that other may have, it is not exactly a penalty in itself.
Trading or holding
Environmental Specialist Dept Of Energy Mon Nov 26, 2007 12:57 PM
I don't know how much I have put into TSP, although it wouldn't take much to figure it out. I have an IRA that I started in the 1980's. My total contribution to that (I quit making contributions in 1986) has been $17,000. Through all the ups and downs of the 1990's and this century, it is now worth a little more than $100,000.
I think I will stick with the slow and steady.
Frequent Trading
Education Specialist USAF Mon Nov 26, 2007 12:57 PM
Frequent traders should pay for thr right to trade. I don't mind if they trade frequently, and hopefully they are making money doing so, but they should pay for that privilidge. They are increasing the expense ratio and reducing the return rate for less frequent traders. If they are making so much money from their trades they should not object to paying for it as they would have to in any other fund. I only make a couple of rebalancing moves a year and I object to my return rate being reduced by their frequent trades.
TSP Trades
HR Chief USAF Mon Nov 26, 2007 12:59 PM
Why should the majority of TSP participants finance the cost of a minority of TSP participants who are "day traders" and trade on a daily basis ? And, where do they find the time to do this while they're supposed to be working ? ?
Re: TSP Trades
Curious DOD Wed Dec 12, 2007 1:25 PM
Same time as you found to post that message.
TSP Day-Trading
Auditor DCAA Mon Nov 26, 2007 1:01 PM
TSP and other Mutual Funds are not designed for day-trading - market timing. Although some people have apparently been successful at market timing, they have achieved their success at the expense of all others that have invested in the affected funds by raising Fund expenses and lowering overall returns for the vast majority of investors.
Accordingly, I agree that TSP should limit trades per month per investor, the same as private Mutual Funds do. Policies should benefit the vast majority of TSP investors -- not just the select few that make frequent trades as if they were stocks.
Although the same restrictions should not be made of individual stock trades, the fees for each trade should increase with each trade made during the month to discourage day-trading that causes volitility and added costs. Not to mention that frequent trading in mutual funds not held in retirement accounts causes a volitility that frequently results in capital gains distributions/taxable income.
Re: TSP Day-Trading
Porcurement Analyst BOP Mon Nov 26, 2007 3:35 PM
The TSP Funds are NOT Mutual Funds are they?
They are Index funds that can be bought and sold each day. I have never heard of anyone buying and selling mutual funds daily - where you are paying someone to manage the fund for you?
Re: TSP Day-Trading
Investigator FDA Tue Nov 27, 2007 9:56 AM
Index fun or mutual fund. Really it is semantics when you are talking about TSP accounts and trading. The index funds try to emulate the major indexes (S&P 500, Wilshire, etc). They do this by buying into stocks that coincide with the parent index. The only difference with a mutual fund is that it does not try to track a major index. Rather it focuses on a particular sector, or management style, etc. Besides some minor differences, we are really talking the same thing.
So, I agree with you, no one day trades on a mutual fund, and no one should on a index fund either.
Re: TSP Day-Trading
Manager DHS Tue Nov 27, 2007 3:14 PM
To clear this up, some mutual funds are indexed funds, some are not. Therefore, indexed fund and mutual fund are not mutually exclusive (pun intended)
If a fund is actively managed (instead of anchored to an index), it can focus on a number of things. Common examples are a major asset class(Domestic large cap value for instance), a particular sector (energy or health care for example).
Give A Choice
Secretary IRS Mon Nov 26, 2007 1:03 PM
Perhaps for the Day Traders, TSP could set up a cost effective plan for them that wish to trade often-costs being shared by those members. The rest of us won't incur their higher costs on our TSP accounts and for a fair price they that are making more money by trading will be satisfied too.
TSP Trading
Logistics Manager DoD Mon Nov 26, 2007 1:25 PM
It isn't a question of whether one or another person can (or thinks they can) make more money, the question is who pays for the cost of that fact or belief.
The TSP report makes its case well. A very small number of the very many TSP participants are driving up administrative costs for all of us, which means they are costing all of us money. Why should I pay for your investment strategy?
TSP Costs
Public Utility Specialist Western Area Power Mon Nov 26, 2007 1:26 PM
Those who create the additional costs should bear those costs
surcharges?
contract specialist Dept. of Defense Mon Nov 26, 2007 1:30 PM
Those who make big returns by frequest trading should not be troubled by a surcharge for each trade over the TSP Board's monthly limit. After all, it should be considered a cost of doing business for them. But since I don't trade that often, I don't feel I should have to absorb the cost of their frequent trades.
Its All About Freedom
Service Rep Social Security Admin Mon Nov 26, 2007 1:33 PM
Your column was excellent and timely, and I would bet that you are right about the rules saving TSP participants from themselves.
But that's how freedom gets whittled away year after year. Other people think they know what's best for other people - and sometimes they do. But that's no excuse to take their freedom away and make choices for them.
Freedom is defined by having choices. The more choices, the more freedom. Less choices - less freedom.
True freedom is the freedom to be stupid. You can teach us, as you are doing very well, but in the end, we must make the choice - or we are not free.
Dave E.
Re: Its All About Freedom
Investigator FDA Tue Nov 27, 2007 9:49 AM
I should also have the freedom to invest my money in a TSP and not have to suck up the cost of frequent day traders. I should have the freedom to not have to pay for you.
You a smoker, Dave?
Thrift Savings Plan frequent trading
Performance Manager Air Force Reserve Mon Nov 26, 2007 1:33 PM
Loved your article. As an Economics major in college, your article talks about the same things you learn in economics classes (as I did over 30 years ago).
You pointed out that people who leave their money in a fund (like the I fund) with regular contributions, make more money than those who "guess" the market and make frequent trades. Again, the same priciple taught in economics classes over 30 years ago.
This is my point - you have people making great claims, versus the reality of what really happens (the TRUTH), when you can simply learn about it (again, "it" being the TRUTH) by getting an education!
And as any Ecomonics major can tell you, this is a wonderful country for getting rich. And (pay attention, this is where education comes in), as any Economics major can tell you, there are two ways to get rich in the United States: 1) Slowly, or 2) Not at all!!!
It is not "buy a lottery ticket", or "drink beer" if you don't win.
Brilliant, per usual
Anonymous Anonymous Mon Nov 26, 2007 1:54 PM
Hey Ralph, you make an excellent point. For real returns over the long term, day trading is an awful strategy. The research shows again and again that buy and hold is the only reliable way to maximze your return.
This bears repeating:
"As the NCO shouted out in all caps: "PEOPLE WHO KNOW HOW TO TRADE AND MANAGE OUR TSP ACCOUNTS MADE ALMOST $100 MILLION DOLLARS IN FIVE DAYS FROM OCTOBER 19 TO OCTOBER 24...." But any person reading this should note: Anyone who left money in the fund and did not trade would have made even more money than those that sold their I fund on the 24th."
Good on you for your excellent example and for being a voice of reason & intelligence.
Re: Brilliant, per usual
ANALYST VA Mon Nov 26, 2007 3:31 PM
True enough, and hindsight is always 20-20.....what if the market had gone down on those days after they IFT'd elsewhere.......would that have been considered brilliant on the part of the TSP members making the trade or would we just ignore this example and move on to something else that "proves" a given point of view?
limiting transactions in TSP system
Park Ranger National Park Service Mon Nov 26, 2007 1:55 PM
Mr. Smith,
your article on Nov. 26th was thoughtful and reasonable. You make a strong case and I hope many people will benefit from it. Those of us invested in the TSP will only benefit from restricting the amount of transactions.
TSP restriction
Supervisor Treasury Mon Nov 26, 2007 2:11 PM
I'm not an advocate for day trading with retirement plans, however, has anyone considered the participants right to invest and manage their retirement plan. I find that two trades per month is going too far with the control of our investment. If transaction cost are a problem, charge a fee and make a profit like e-trade, but don't hold my account captive to your management. The reason is simple......it's not yours to hold.
limiting frequent TSP trading
not stupid none- retired from DOD Mon Nov 26, 2007 2:12 PM
We live in a free market economy. If frequent trading by the few costs everybody more money, the answer is to charge those frequent traders for "excessive trading", say $5 to $7.50 per transaction over some amount, say for every trade in excess of 3 per month.
This is fair. It is NOT FAIR to prohibit frequent trading. Our President's name is George, not Vladimar, and thank goodness we do not live in a socialist or a communist society. So, we should still allow frequent trading.
While I'm on a roll, the TSP should buy the technology necessary to permit trading up until say 5 minutes before the markets close. It is STUPID, repeat STUPID to restrice a trade deadline of 11 a.m. in New Orleans (home of the TSP bureaucrats), i.e. 12 noon in New York, considering that the wall street stock market does not close until 4 p.m. in NYC. This prohibits TSP participants from selling their stocks when they can see shortly before the market's close that they have appreciated in value!
Re: limiting frequent TSP trading
Investigator Dept. of Labor Mon Nov 26, 2007 2:54 PM
The TSP is not designed for frequent trading. You are retired - if you do not like this restriction you are free to withdraw your money and seek an investment vehicle that allows trading 5 minutes before market close. Just don't do it with my TSP and with me paying part of your transaction costs.
TSP Frequent Trading Fee
Analyst Air Force Mon Nov 26, 2007 2:46 PM
If people are making money by frequent trading, they can pay for the privilege. If they're earning enough to make the effort worthwhile, a small fee shouldn't be an onerous burden for them. Those of us who believe in letting dollar cost averaging work for them shouldn't have to subsidize the Attention Deficit Disorder investors. Rebalancing once month is more than enough.
Limiting the Number of TSP Trades
Property Manager GSA-PBS Mon Nov 26, 2007 2:52 PM
I believe "stay the course" with minimum trades is the way to go for long term investors. By allowing a few TSP participants to perform unlimited trades, the overall return is lowered for all, and I very much doubt that in the long haul, this "so-called" get rich quick method is in fact, a viable way to maximize return on investments. For one thing, the trades follow a 1-2 day delay, and as volitile as the market is now, the traders absolutely cannot predict what the market will do on a day to day basis. In my opinion, diversification and staying the course for the long run is the better strategy. I would be in favor of limiting the number of trades in a given period of time so the administrative costs would be lower, resulting in higher returns for the rest of us who don't necessarily believe in gambling our future resources away with untrained and unsupervised speculation. If the professionals cannot predict the market with certainty, the amature traders are in fantasyland.
CHARGE US MONEY - PLEASE!!!
Engineer FAA Mon Nov 26, 2007 2:54 PM
Simply charge us for trades above and beyond 2 per month.
$15 should cover it.
When I was doing this I made well over $1000 per many trade (above and beyond what I would have made had I let it ride). Sometime I lost a bit, but it's my money.
I ended up $10k richer by doing this.
So please, let capitalism work it's magic, and charge folks for the service they desire. If they want it, they will pay.
Socialism and Communism would have us limit what we can do, and have the group think as one. Let us be individuals.
We're a capitalistic society, and should be given the freedom to pay for whatever services we desire.
Lower Investment Costs for All
retired USFS Mon Nov 26, 2007 3:01 PM
A small number of people are driving up the transactions costs for everyone in the TSP by trading their funds frequently. I say to them, go for it! But if they speculators are making out so much in the market let them pay, as they gladly ought to, for their transactions. Glad for new policy issued by TSP. Keeping the costs down in TSP is keeping this plan like none other.
TSP trading
Supervisor VA Medical Center Mon Nov 26, 2007 3:11 PM
I totally agree with your article. I have been participating in various funds through various companies and have met several different financial advisors from different investment firms. What you advise follows what they advise and what I have observed through the years. I believe we should be able to move monies but there should be a restriction on this. I really don't like having to pay for a few who want to play Russian roulette.
I am in favor of the rule change
Administrative Law Judge Social Security Administration Mon Nov 26, 2007 3:55 PM
I am not a frequent trader. If those who are trading frequently cost ME money then the rule needs to be changed. If, as they say, they make lots of money frequently trading, then they should be happy to pay the costs of making those trades rather than being outraged at not having me to subsidize them any more. It is I who should be outraged not the frequent trader who is freeloading off of me.
let them pay
engineer NASA Mon Nov 26, 2007 4:02 PM
If the frequent traders are making as much $$ as they claim, they shouldn't mind paying for the convenience. ('real traders' do)
Otherwise, there are lots of places they can take their constant trading.
Those of us who don't cause the extra cost shouldn't have to pay for those few that do.
The TSP was never intended for frequent trading. I doubt they are making that much $$ there anyway. If they were, I think they'd be trading with the big guys. [ 'real traders' aren't wasting their time & money in TSP's indexed funds -- they are out where you can make really big $$].
I have to admit that I get a good chuckle reading the recommendations from the various 'tsp traders' sites.
TSP day traders
Retired VA Mon Nov 26, 2007 4:03 PM
TSP just needs to charge the people that exceed a maximum number of trades a fee. And that fee should be enough to pay 100% of the TSP cost of the trade, not just offset the cost. It doesn't make sense for the rest of us to bear the costs of these wannabe Warren Buffets. Who, by the way, doesn't think he knows enough to time the market.
With respect to TSP/401K funds, most financial experts seem to agree that you should have a mix of funds that you're comfortable with, and then occasionally adjust this mix to maintain the percentages you desire.
financial management
Network Specialist USAF/USAFR Mon Nov 26, 2007 4:54 PM
All I have to say is, look at the three years these funds made no money at all. If I can manage my money better than the so-called "experts" stop paying them and start paying me. Maybe the 3000 can provide insight into what may be going on behind the curtain and make us TSP participants money instead of crying about it.
Re: financial management
lr spec DoD Mon Nov 26, 2007 5:46 PM
YOu should probably go back and read the main point of the article to which this comment is attached--the author has made some good points. It is relatively easy to trade as often as you want and to make money when the market is going up. No one has been able to do it consistently among professional traders by dipping in and out and trying to time the market. Perhaps you should quit your job and then buy a small country with your ability to do what no one else has been able to accomplish.
Pay to Play
Manager TSA Mon Nov 26, 2007 5:58 PM
I have no problem with people moving their money at will, I do have a problem paying for them to move their money at will. If people want to "day trade" or "play the market", I say let them, and let them bear the full cost for their transactions. If they are making that much off their moves, they should be happy to pay full price to do so.
TSP Trading Limits
Program Analyst GSA Mon Nov 26, 2007 6:33 PM
Good for the TSP. This is a change that should have been made long ago. A few people can claim tremendous returns from their trading. The rest of us can be skeptical of their claims. The "Recommendation on Limiting Frequent Trading" document ought to be required reading for TSP participants.
TSP trading frequency
Computer IT Specialist DOD, MCTSSA Mon Nov 26, 2007 6:38 PM
OK as long as it does not cost "me" additional fees. Let the trader pay the fees.
Market Timing and Your TSP
Revenue Agent IRS Mon Nov 26, 2007 6:43 PM
Where is the Securities and Exchange Commission? How do Federal government employees get away with market timing in the TSP while trading restrictions are so widely implemented in most retirement plans? My prior employers had severe restrictions, such as allowing changes in or out of the international funds only once every 60 to 90 days.
THE GOOD OLD DAYS
ANALYST VA Mon Nov 26, 2007 7:19 PM
I'm sure that the majority of folks who have issues with more frequent changes yearn for the good old days when we had to have our changes in by the 15th of the month so they would be effective by the end of the month.
This proposal is a HUGE increase over the old days....you will now get to make 2 trades a month...semi-real time!
Such a deal, especially after we, the TSP participants, paid for one aborted computer system, one that works, and will be paying for an even grander system in the near future.
Personnally, I'd like to see a strict accounting of this issue as well as other proposed high dollar value activities the Board plans..... Oh! I forgot...we never will, since it appears the Board does not feel we're smart enough to deal with issues of this magnitude...they will continue to make changes under the cover of darkness despite a perfectly good website they could proactively use as an open information outlet.
Market Timing and Your TSP
physical scientist mms/doi Mon Nov 26, 2007 8:24 PM
How often and how much has the Fed (Uncle) borrowed from the TSP funds?
I am not a "high roller" like the small percentage of investors who profited from the I Fund, but I would like to have the opportunity to make $ by transferring my funds more than 2x a month without penalty.
Why segregate out a few thousand TSP investors who profited from the I Fund? Better to charge a flexible rate depending on the trading volume monthly, quarterly, semi-annually, or whatever suits your fancy. I can't be that much considering the number of TSP investors. Tom estimated that by spreading the costs it would be less than $10 per year.
I do not care for your "changing the rules as you play" type of managing funds style. It is poor planning on your part or the TSP managers part. Rules should be outlined up front before TSP creation and not changed to suit your fancy.
Couldn't be better stated!
TSR SSA Mon Nov 26, 2007 9:56 PM
This really sums it up all! I think we have to stay focused on the prize at hand. We all are looking for the best bang for our buck, and we really all must agree that limitations is the benefit of the whole TSP community. All of you who are bragging about you day trading are not being honest with yourselves or just haven't been day trading long enough to realize the losses! TSP investing really is a marathon for most of us, and not a sprint to the finish line of retirement. Although, many might be in the catch up mode, most are not!
Trading as a Free Good
International Relations Specialist, YA-03 Department of the Army Tue Nov 27, 2007 2:18 AM
Whenever people get something for nothing, someone else pays. Daily in and out trades are not about investing; they are about speculating. If a government employee wants to speculate, he/she should be able to as long as transaction costs are paid. Personally, I consider myself an investor. I rarely move funds. When I buy or sell stocks from my brokerage account, I pay a transaction fee. I object to speculators bidding up TSP overhead and pay nothing.
Sour Grapes
Engineer FAA Tue Nov 27, 2007 6:18 AM
My last word on Day Trading.
99% or research is done after work.
4 quick glances at selected web pages first thing in the morning (I waste 5 minutes doing this, you waste 5 minutes getting coffee - I detest the stuff).
4 quick glances again at lunch, then make the trade before noon.
It takes up all of 10 minutes of your work day, so NO productivity is lost here.
(I see the smoke breaks and football talk waste more time each day)
Please don't limit our freedom, just charge us by the trade ($15 is OK).
And YES, most of us are honest with gains and losses. My $ was the result of many good trades coupled with several bad ones. Nobody's perfect, but ...
...what is wrong with us deciding on what to do with OUR $?
Please, no sour grapes from those who are opposed to it. Just because you choose the safe, easy route, don't impose your 10% annual returns on us.
Jealousy over over those making higher rates or returns (even though we work for it), is not right.
IFT
Civil Engineer DoD Tue Nov 27, 2007 7:21 AM
It's to bad that you are so closed minded that you can't even get your head around the idea that some of us Feds can educate ourselves and beat the so called experts. You've just turned into a lackey for party line and no longer represent the federal employee. You really need to expand your horizon's and just see what these so called market experts have as an educational background.
Re: IFT
lr spec DoD Tue Nov 27, 2007 9:00 AM
One of the financial experts referenced in the article was Jason Zweig. "Jason Zweig is a senior writer for Money magazine and a guest columnist for Time magazine and cnn.com. He is also the editor of the revised edition of Benjamin Graham's The Intelligent Investor (HarperCollins, 2003), the classic text that Warren Buffett has described as "by far the best book about investing ever written."
Of course, that does not make him as knowledgeable about finance and investing as a civil engineer. Just because no one else has been able to reliably predict the future of the stock market, you should be able to base on your confidence and sustained experience as a TSP investor.
Perhaps the writer of the article was trying to help most TSP investors by pointing out the obvious failure of any experts to win by timing the market. Perhaps you will have better success and will soon find yourself leading a mutual fund company based on your demonstrated ability. Why do you want to insult the rest of us inferior feds? I am sure your long term success of beating the rest of the world's financial experts will speak for itself.
Re: IFT
Investigator FDA Tue Nov 27, 2007 10:12 AM
It must be difficult working two jobs, DoD and Investment Strategist. That is what I can't get my head around. Some investment strategists spend years in school, pour over journals, textbooks, test multiple investment strategies, access numerous data bases, and have years of day-to-day experience. You on the other hand check Yahoo! Financial once or twice a day and couple that with your monthly Money magazine subscription and have a world-class financial education. The real idiots are those that spend all their time and money on a education in finance. You have all of them beat already because you didn't spend the money they did on long-term education. Heck, a Money magazine subscription only costs $10.
Also, if you can explain how I am a government lackey, walk a party line, and how I have become downtrodden by my 6 years of government service just because I don't want to pay for your day trading, I would appreciate it.
Expand that horizon, son!
TSP Day Traders
Auditor USDA Tue Nov 27, 2007 9:08 AM
I don't begudge anyone who attempts to enrich themselves with their own funds; unfortunately, if the minority are the basis for increased costs for the majority, then those frequent traders needs to bear the true costs of their actions.
It isn't fair nor logical to expect the majority to foot the bill for the minority.
In suml, I'm all for a restriction on the number of trades within a 30-day period (and that would be a total that encompasses all of the TSP funds regardless of how many someone actually has in their individual TSP; e.g., five exchanges/trades).
Mike
TSP Trading
General supply speicalist NAVSUP Tue Nov 27, 2007 2:21 PM
I think charging a fee after so many trades is a great idea and since the traders are making more money they should not have a problem paying it. At least they will not be taking away from my funds for their frequent trading.
Subsidizing Day Traders
Attorney DoD Tue Nov 27, 2007 2:22 PM
All TSP account holders should not have to subsidize the day trading of a few thousand. If folks want to day trade, that is their right, but they should pay a fee for it just like any other day trader pays to his brokerage firm.
restriction on IFT's
Forester US Forest Service Tue Nov 27, 2007 2:39 PM
Whether someone chooses to buy-and-hold, or make frequent transfers in their TSP accounts is their business, as long as both approaches are permitted (they are) and neither approach is causing major problems for the TSP as a whole. Even with frequent trading by a small number of folks (3,000 people out of 3.8 million TSP participants, according to TSP), overall expenses for managing the TSP remain very low - about 2 or 3 basis points overall. That is less than 1/20 the expenses of the average mutual fund. So what is the problem here?? I don't need paternalistic so-called experts telling me that it would be better for me to not trade my account!! I can make that decision for myself, thank you, and it is MY MONEY after all. I agree with a previous poster that the FRTIB should be subject to a recall for this outrageous proposal. Get some people in there who TRULY represent the rights of TSP participants.
trading TSP accounts
Forest Soil Scientist USDA Forest Service Tue Nov 27, 2007 2:46 PM
Sure, people would have made more money by leaving their money in the I fund until October 31. But yesterday, the I fund closed at $24.37, nearly $2.00 down from the October 31 price. Why didn't you include that piece of information in your article?
Sour Grapes
Retired VA Benefits Counselor VA Tue Nov 27, 2007 3:38 PM
Glad you are willing to pay your freight. Just be aware that winning streaks are just that. See the TSP Articles Archives from Jan-03 re "Market Timing" and how the herd did in the ups and downs. The article gives $ amounts in and out of specific funds with the dates of peaks and valleys. Other past articles deal with emotional trading. MOST timers lose over time. The Aesops Fable re the ant and grasshopper has a grain of truth. Hope you are the exception but a word of caution to the other grasshoppers out there.
The TSP Board allows frequent Trades
QA FRCE Tue Nov 27, 2007 9:00 PM
Comments on both sides of the issue. What I can't understand is why are we frequently trading funds, because we can? Why can we? Because the TSP has allowed us to. Why did they allow us to? I don't know they are the so called experts. Why didn't they start extra fees from the start when they allowed frequent trades? Again I don't know. I do know this they were the experts they allowed us to utilize what they gave us and some of us did. Everyone doesn't agree with the extra fee's but some of us do because we feel we should be held accountable for our actions. The great minds and the TSP board should have known that they just couldn't allow us frequent trades then expect us to just look but not touch. We didn't make the rules we utilized what they allowed us to do. If there are limits which I don't agree with but if there is to be a limit I am for (3) free trade not limit me to two and extra fees for any and all additional trades. I don't expect anyone to pay for my trades.
Market Timing and My TSP
Statistician DOD Wed Nov 28, 2007 10:01 AM
How difficult is to understand that what is driving the TSP administration cost up are all the daily interfund transfers of the half million participants on the L 2040,
L 2030, L2020, L2010, L-Income (ALL L-Funds). Their accounts have to be balanced on a daily basis through out huge Interfund Transfers... The TSP Board made a mistake in creating the L-Funds and now they need escape goat to blame... "3000 Day Traders" who do IFT frequenlly to protect and increase their TSP retirement accounts. PLEASE PUT THE BLAME WHERE IT BELONGS !
I AM VERY SUCESS BECAUSE I GOT WORKING TRADING SYSTEMS AT HOME BASE ON NEURAL NETWORK ARTIFICIAL INTELLIGENCE WHICH DO PROGNOSTICS BASE ON PATTERNS RECOGNITION... AND I SHARE THE PROGNOSTICS FOR FREE AT THE TSPTALK.COM
Re: Market Timing and My TSP
Supervisor DoD Wed Nov 28, 2007 12:52 PM
Normally I don't comment on a typo or two, but the ones in your post are so blatant that it's embarrassing.
"escape goat" instead of scapegoat?
"I AM VERY SUCESS" instead of I am very successful?
"BASE ON PATTERNS RECOGNITION" instead of Based on pattern recognition? This is basic high school grammar.
Aside from that your assertion that there are thousands of daily IFTs in the L funds is wrong. Each L fund is rebalanced within itself. Everybody who is in that L fund gets a share of it, the individual shares themselves are not rebalanced.
Market Timing and My TSP
Statistician DOD Wed Nov 28, 2007 10:04 AM
How is it possible that TSP participants who, perhaps, have little experience compared to professional investment traders can make money by engaging in frequent trading?
DO YOU TRUST THE PROFESSIONAL INVESTMENT TRADERS WITH YOUR MONEY ???
SHAME ON YOU ! ! !
TSP Trading Limits
Computer Support USDA Forest Service Wed Nov 28, 2007 4:02 PM
If those people are making so much money trading, then it should not be a problem for them to bear the cost of their frequent trading. It's like paying fees at campgrounds, those who camp pay for the upkeep.
TSP Fund Timing and Transfers
Program Management Navy Thu Nov 29, 2007 4:42 PM
I disbelieve 3000 of 3.6M investors are the only ones involved. EVERYBODY I know switches three to five times monthly. I am up 8% in my TSP since January in a number of funds, simply because I ducked a number of downdrafts, and I am diversified, meaning in genuine Wall Street gibberish, who knows what goes up or down when? With the FOMC printing money like it is going out of style, the liar loans crashing mortgages, housing tumbling a second time after rolling over, you have to be nimble and keep your sanity. I wouldn't mind paying a fee to save my life per "trade" over two to three a month transfers. Anything else is paternalistic crap.
By the Way, on other Annuity Trading Platforms
Program Management Navy Thu Nov 29, 2007 4:46 PM
AXA-Equitable has a program guarenteeing an annuity based on guarenteeing 6% a year and unlimited trades between fifty funds. Whoever says such programs don't exist is feeding you and everyone else pap.
By the way, the easy way to have unlimited trades is so simple. Just charge a small fee, and balance cost with an added stipend for those who DON'T trade.
Incentivization America. That's the answer to paternalism.
Cherry Picking Data
Contracting Officer DLA Fri Nov 30, 2007 6:19 PM
I noticed you pulled some prices and did a little research for the days sited as examples for participants trading into and out of the I-Fund. You then go on to state the closing price on October 31 to demonstrate the profit that would have been made if the investors had maintained their shares in the I-Fund.
I took a look back at that price and those since. I couldn't help but notice that you chose the highest closing price since that time on 31 October. If you want to lend more credence to your article, you might want to keep from cherry picking data to present your case. You may even want to present an objective viewpoint in your articles as opposed to parroting back anything supporting your position.
Re: Cherry Picking Data
manager Dod Fri Nov 30, 2007 8:13 PM
Or, perhaps, he picked that date because it happened to be the end of the month--the dates used by most funds for computing gains and losses and that includes the TSP.
The reality is that market timers don't do well over time as indicated by the article. Whether the writer picked October 31 or Nov. 31 or some other arbitrary date doesn't make much difference in the long run. In this case, the initial dates were picked by the TSP because of the heavy trading (and expenses for all TSP participants) on those particular days. ONe guy apparently wanted to crow about the fantastic returns of the market timers but ignore the money they would have made if they had just held on.
The bottom line is that the frequent traders are costing the rest of us money while they gamble with their retirement funds. Everything else is smoke and fog to cover up this reality.
Re: Cherry Picking Data
Clown US Marshals Circus (Service) Sat Dec 1, 2007 5:38 AM
TO: Manager, DOD.
1. Who cares if day traders do well. It is their money.
2. If in fact day traders eventually lose, there should be no problem. Their funds will simply be traded away and there will be no more transfer costs to worry about.
Do you realize with regards transfer costs, we are not talking a drop in the bucket, we are talking a drop in a swimming pool?
This is a perfect example of fixing something that is NOT broken.
Re: Cherry Picking Data
photo DON Mon Dec 10, 2007 3:00 PM
That is exactly what the TSP has done when they cite the examples for making the restriction. Read the reports. Tell us how much the L funds cost for the year. And I wonder what would be happening if the "3000" problem investors was more like 300,000. Would they still change it? Get real, 3000 TSPers are not causing this.
S&S
Good old newsletters and pros
Aerospace Engineer Navy Sun Dec 9, 2007 2:17 AM
I think you're comparing apples and oranges here. On the one hand you have examples of "professional traders" and newsletters having limited gain from frequent trading. On the other hand you have people trading their own money making large returns. Between these two, you emphasize the professionals, claiming to buy/hold, and ignore the huge daily trade volume (outside TSP). My question is: If I can make above 13%, why would I sell my opinion (i.e. become professional trader or newsletter). 13% is more than enough to retire/live on, and I can focus my efforts on quality of life, instead of chasing another paycheck. If I can't make 13%, maybe being a "professional" or writing a newsletter would be a good way to generate income. Theres all kinds of "trade stories", i.e. take out the top 10 return days and you don't have any return. But these stories don't really provide guidance, except to leave the money in hands of "pros", who work at "managing" money, instead of making it.
Frequent Trades
Manager DOJ Mon Dec 10, 2007 3:14 PM
Let them trade, and let them pay they cost. However, those who use the L funds should also bear the cost of daily trading as well, as their accounts are rebalanced daily.
By the way, what is the actual cost per trade?
TSP investors are afraid
scientist NA Mon Dec 10, 2007 10:33 PM
I have read these comments and some of you are makin g me sick. The tsp board is about to take your freedom away and your letting them do it.
Some of you have mentioned "Dollar cost averaging" or "buy and hold" If you believe in those strategies you are AFRAID to manage your own money. Stop being afraid.
People who trade in and out of the tsp are making money hand over fist. Look at tsptalk and the various trading systems. They are making double or even triple the amount of "buy and hold"
To those of you who said "why should we pay for other's transactins" Most of the frequent traders want or are willing to pay a fee. The short sided board won't give them the option.
Don't believe the propaganda spread by the board. They are just trying to scare you. Remember back when they said that the tsp was better than the government pension. You even had the option to switch. For those of you who are too young (google it). When has the government done anything to help you?
Re: TSP investors are afraid
Manager DoD Tue Dec 11, 2007 2:59 PM
Don't fall into the trap of thinking that market timing will always beat buy and hold. It's not true.
Intelligent market timing will yield good returns. Ill-informed market timing will yield poor returns.
Intelligent buy and hold will yield good returns. Ill-informed buy and hold will yield poor returns.
What really matter is that you know what you're doing with whatever approach you take.
Real TSP Purpose
Retired Army Tue Dec 11, 2007 11:51 AM
For everyone's historic perspective, TSP was started (and CSRS abandoned) to pump huge and consistent (payroll deduction) cash into commercial marketplace. Big business lobbied and was rewarded by Congress; then and now this money has provided jobs and financial support to American financers. Many businessmen salaries are paid from the TSP "overhead,” and distribution of said overhead is ample given steady payroll cash input continues as has been. So don't get all patriotic and teary eyed when the funds managers tell you how “long term security” is what Congress intended, because yes that was what Business and Congress intended. Yes, to have Federal workers forced to put a goodly part of their Payroll into marketplace coffers, to use as they intended; keeping the masses just happy enough, but not having "individuals" make waves (or far exceed TSP management’s nominal average yield).
So bottom line: TSP was established to input Federal cash into Business (not make Fed workers rich!!). So sit back down, Congress knows what they want(ed), and you are never on the Board.
Re: Real TSP Purpose
accountant dfas Tue Dec 11, 2007 4:36 PM
That's the stock market in general, the TSP just happens to be a cog in that wheel. Business flourished because of investor cash long before the TSP was formed.
Look at the big picture if you really want to know how things work.
TSP board propaganda and lies
scientist NA Tue Dec 11, 2007 5:09 PM
The Tsp board wants you to "buy and hold". But it's not always the best option. You should have a choice. This is my point. Don't be afraid to take control of your finances.
The Tsp board members will probably get promotions/ raises in salary by minipulating the facts.
Please don't be fooled. They are using buzz words/phrases like "gambling with your retirement to make you mad and agree with them.
Here are 2 events for everyone to think about.
"The tsp is better than a pension CSRS"
"Oursourcing government workers to contractors is a great thing. You can save the agency money"
The above statments are LIES. They hurt government workers.
Here is another lie.
"Trading in and out of your Tsp is wrong"
Consider that you are being lied to again, just so some board members can get high evaluations on their performance standards.
Botton line. You are losing your freedom and some of you won't even know it until it is too late.
TSP Trading
Chemist Air Force Wed Dec 12, 2007 2:15 PM
The TSP was never meant for day-trading. It wasmeant for long-term growth of your investment, thus the L funds were established to SLOWLY change the distribution of your funds. If you change more than once a month, you should pay for it. You are cutting into my returns by your trading. If you wish to speculate, use short-term money that you can afford to lose, not long-term money destined for retirement.
Playing by the rules the TSP Board established
Meteorologist NOAA Mon Jan 7, 2008 12:07 PM
'TSP is not designed to be an account for frequent trading of funds.'
Why did the TSP board enable daily interfund transfers in the first place then?
People managing their own TSP accounts are being villified as 'frequent traders'. In actuality, they are playing by the rules that the TSP board established.
Limiting TSP Trades
Manager DOD Tue Jan 8, 2008 9:02 AM
Instead of limiting the number of trades why not charge for each trade? Or maybe charge for each tade over two? Companies that trade stocks on the internet make money, not lose it. This would allow users to trade funds if they wished and lower transaction costs for everyone else.
Frequent Trading
Engineer Navy Thu Jan 10, 2008 5:52 AM
The reasons for trading frequently are: a) TSP rules permit daily fund transfers, b) potential for return higher than the other funds, c) my TSP balance is several times my annual income, so it is beneficial to optimize the return, d) I need time to develop skills for managing those funds during retirement. The reasons that I continue are a) I have obtained higher returns, b) I learn how to analyze / evaluate the options. I will discontinue when my returns drop below other options. There is no option to transfer those funds out of TSP, so discussions on doing this activity elsewhere are not relevant.
The new rule are not clear. Two IFT a month with additional transfers into G allowed. Does 1% more per day into G qualify under the new rules? i.e. two IFTs, followed by 1% into G, then 2%, etc. Or, does 10% G increase qualify? Or, is the 3rd trade only 100% into G?
My TSP analysis / software development is done at home, on my own time, equipment, software.
Let the frequent pay the cost
Policy Analy IRS Mon Apr 28, 2008 8:33 AM
If the people who think they can make more money by continually trading their TSP stock them let them do so but ONLY IF they are willing to pay the costs associated with their activity. They may quickly see their profits plummet to a negative number. Also, I don't see how they think it fair that the minority should gain at the cost of the majority.
TSP 30% Marginal proposal
I.E.T. DoD Tue Sep 30, 2008 10:00 AM
I would like the oportunity to risk up to 30% of my TSP account balance for marginal calls and puts or to buy or sell stocks so I can consistantly add value to my TSP retirement portfolio. I read this year of the possibility of a portion of the TSP transactions being farmed out to minority businesses. Please direct me to a qualified TSP broker! September 30, 2008.
Market timing and Your TSP
State Department
Mon Nov 26, 2007 9:49 AM
Perhaps the TSP should allow some small number of free transfers, perhaps two per month (exact amount TBD), but deduct the transaction cost from the transferee's account for any above that. One reason the "daily traders" are making money in the TSP is that all transfers are "free", although the transfer cost is apparently shared by all participants. Make the frequent traders pay full freight so the rest of us don't have to pay for their activity and fund their gains.
Re: Market timing and Your TSP
SSA
Wed Nov 28, 2007 5:09 PM
Diversity for FRTIB
USDA
Mon Nov 26, 2007 10:05 AM
It appears to me that the will of the participants has not been heard. When I look over the Credentials of the TSP board we do not have employee representation. I do not recall ever getting a ballot or any other device to choose the board or the director of our thrift savings or hire the Executive Director. When I look at the Make up of the board it doesn't appear to be very diverse either with names like (Andrew Saul, Thomas Fink, Gordon Whiting, Alejandro Sanchez, Terrrance Duffy and Our Executive Director Mr. Gregory Long. If you feel like we need a recall election Let Fed Smith know your concerns. If you feel like employees should have a voice on this board then lets see about opening up the board to 4 additional seats for employees and the Executive director is not the dictator. I feel like we need representation on this board. If you feel the same Lets Do the RECALL. Let your voice be heard in the board room of FRTIB. LET FREEDOM RING
Re: Diversity for FRTIB
USAF
Mon Nov 26, 2007 11:16 AM
Re: Diversity for FRTIB
USDA
Mon Nov 26, 2007 5:03 PM
I didn't write any comments. but...
FAA
Mon Nov 26, 2007 10:08 AM
I made a considerable amount last spring (almost $10k trading around $60k of funds) for a two month period. That's a 100% annual return had I continued.
This is vs. the 10% or so if I "let it ride".
I doubt my numbers would have been that high if I continued the entire year, but they would have been more substantial than doing nothing.
The bottom line is, if you are willing to put enough time each night watching overseas markets (I did it all via trades from the I fund to the C fund and back), you can do very well.
Trading in some of your sleep, along with all your free time wasn't something I care to do full time. I was just proving to others that it can be done, and be done well.
Bottom line, if folks are willing to risk their own money, let them do it. Charge a fee for each trade over once a month. The money to be made will easily pay for that fee.
Re: I didn't write any comments. but...
ICE
Mon Nov 26, 2007 10:38 AM
Re: I didn't write any comments. but...
FDA
Mon Nov 26, 2007 12:57 PM
Frequent trading
Dept. of Labor
Mon Nov 26, 2007 10:09 AM
Out of the 3,000 or so frequent traders I'm sure there are at least 10 or 15 who consistently make money doing so. Although these individuals can provide us with great anecdotal information concerning their trading acumen, all they are really revealing is their ignorance. Studies show that even these people will eventually fall back to the average and likely even below. Those that feel otherwise should quit the government and take up day trading -- they should be able to retire in no time. If making money in stocks is so easy, why do stockbrokers advertise? They should keep quiet, make their fortune and retire. But because these frequent traders are costing the rest of us money, restrictions are necessary.
Re: Frequent trading
FDA
Mon Nov 26, 2007 12:51 PM
Re: Frequent trading
FAA
Mon Nov 26, 2007 2:47 PM
Yes, I can make more day trading, if I choose to dedicate 20 hours of each day to it. I prefer to dabble in the market instead, have plenty of family time, and continue with Engineering (which I chose decades ago).
Anybody can make money. There's no secret, or magic to it. But it's a case of "Will spending all your waking hours, eating asprin and tums by the case, and ignoring everything around you make you happy?"
Even if you make a million dollars doing this, the time lost with family for the 2-5 years trading was more than I could afford, or cared to afford.
But don't discount what a little knowledge can do. Some simple correlations with overseas markets, a few simple charts and extrapolations, and anybody can do better with their TSP.
We don't, because we choose to spend out time doing other things.
TSP Restriction Benefit will go to court ! ! !
DOD
Mon Nov 26, 2007 10:09 AM
What a stupit closing !
" While a more restrictive policy will not benefit some participants, it is likely to produce better returns for the majority of TSP participants who do not trade on a regular basis. "
Do you realize the half million participants on all the five L - Funds are the ones causing the increase on the fund management cost ?
Re: TSP Restriction Benefit will go to court ! ! !
DoD
Mon Nov 26, 2007 10:22 AM
The L fund rebalances as one large fund--not several thousand individual trades in the most expensive fund (for the reasons given in the report).
No doubt, some who like to trade want everyone else to pay for their gambling problem. Most of us just want to have a good retirement system and the tSP is apparently trying to protect us.
Re: TSP Restriction Benefit will go to court ! ! !
USA
Mon Nov 26, 2007 11:38 AM
Re: TSP Restriction Benefit will go to court ! ! !
DOJ
Mon Nov 26, 2007 4:45 PM
Market Timing
US Army
Mon Nov 26, 2007 10:21 AM
A compromise on this issue might be to create separate categories of investment options. On category would represent buy and hold, with the current cost structure, and the other category market timing, with an approbpriately higher cost structure.
Then anyone who expects to be able to time the market could try to do so, and pay the price for such behavior, rather than spreading the cost to those who do not engage in frequent trading. Each participant could get an individualized approach to TSP, without unfairly sharing the burden of personal activity across all share holders.
There could even be tiers of activity, with appropriately structured costs. In fact, the tiers could help the fund managers anticipate the level of activity in a fund, which in itself would keep the costs down for all participants.
Re: Market Timing
DOT
Tue Nov 27, 2007 9:48 AM
Cramer's (CNBC) take on buy and hold:
Labor
Mon Nov 26, 2007 10:36 AM
...If anything, buy and hold is a completely reckless and irresponsible strategy. This is why I have always preached "buy and homework." There's nothing wrong with buying a stock with the intention of owning it for years, as long as you're willing to check up on that stock every week to make sure that your thesis for owning it hasn't fallen apart. Too often people regard buy and hold as a license to pay no attention to their investments and hide their heads in the sand when things turn sour...
Re: Cramer's (CNBC) take on buy and hold:
USA
Mon Nov 26, 2007 2:51 PM
The context of the TSP indexed based funds that hold hundreds if not thousands of stocks, the proportion of any one company’s proportion in a fund in mathematically determined and maintained by the index. In this environment it’s possible to make good long term returns with an intelligent buy and hold allocation, it’s also possible(although more difficult) to make good long term returns with a market timing strategy. The assertion that one of these approaches is completely reckless and irresponsible in the context of the TSP is wrong.
Re: Cramer's (CNBC) take on buy and hold:
FDA
Tue Nov 27, 2007 9:30 AM
However, the TSP is a fund-based system where you don't have to do the trading; it is already done for you by asset managers. A mutual fund (a.k.a., what the TSP is) is designed for greater ability to diversify your money amongst multiple stocks/sectors. No one in their right mind goes to E-Trade to purchase mutual funds for day-trading. ou won't make the kind of money in mutual funds that you would in stocks, plain and simple. For those who think they can time, and beat, the market, dabble in stocks instead. By trying to work the TSP you are just proving you have no idea what you are doing.
As for your Cramerism, I think you had better listen a bit closer and note if he is talking stocks or mutual funds.
MUTUAL FUNDS ARE NOT STOCKS!
Freedom and Responsibility within the TSP
DOJ
Mon Nov 26, 2007 10:38 AM
A LOT of people have opinions concerning investing! Peoples opinions are not paramount to MY TSP Account, because it is MY TSP Account.
A Basic concept of the TSP is the Freedom for "Participant Involvement." The TSP is not a defined benefit plan. It was created knowing there had to be Participant Involvement. Mr. Smith says "keeping the TSP true to its original intent" will likely save federal employees a great deal of their retirement money. Well, who is responsible in this type of program? Is it the Government or is it the individual?
One point I would attempt to make here is that the individuals actively participating in their retirement program may well be the ones most informed and comfortable with their actions. Yes, the TSP goes a long way to "protect us from ourselves." But the Gov't did not assume total responsibility in this program. The Gov't indicated we had freedom to fully participate.
So, please be cautious indicting those participating most.
Timing the markets
FAA
Mon Nov 26, 2007 10:41 AM
If people want to make frequent trades and think they can make money that way, then congratualations but let them find a new career in hedge fund trading. I work for the Fedral Government, don't have the time nor the inclination to trade my TSP funds on a daily basis, and would rather see steady, gradual returns increase my TSP balance over the long haul. And I believe in keeping those TSP expenses very low, since this is a key factor in saving our money for all of us!
TSP transactions
DoD
Mon Nov 26, 2007 10:53 AM
If folks want to transact daily, there are plenty of avenues to do that other than the TSP. I agree with the limitations on transactions. If you can't stay the course with one or two transactions a month, you're in the wrong vehicle.
Frequent Trading of TSP shares
DOI - Bureau of Reclamation
Mon Nov 26, 2007 11:02 AM
Both extreme points of view have their merit, as well as ones in between.
Since those who wish to buy and hold will possibly earn less in the long run (likely debatable), the "buyers and holders" should not be penalized buy the added costs of those who wish to trade more frequently (market timers, etc.) However, the "frequent trading" crowd (some more frequent than others) should not have their capacity minimized for doing what they believe is right for their retirement future.
A compromise (exact specifications to be worked out by the powers that be) could have a certain number of annual trades allowed for each partcipant with little or no cost charged to the individual account (say somewhere between (12 and 24). For more frequent traders, a cost tacked on as a % of the real-time value of an individual trade would be charge to the individual trader's account on an escalating scale (# of trades/year) upwards (i.e., 35 - 36, 37 - 48, etc.)
Possibly, the best of both worlds !
Re: Frequent Trading of TSP shares
USAG
Tue Nov 27, 2007 10:52 AM
Frequent Trading
USDA
Mon Nov 26, 2007 11:07 AM
Folks (experts) that want to trade frequently should/can do so using stocks, not the TSP.
Frequent Trades in the TSP
USA
Mon Nov 26, 2007 11:10 AM
I'm glad people are making money buy trading so they can pay for their trades with some of their profits and not have me pay for their trades with mine.
Day trading
Treasury
Mon Nov 26, 2007 11:12 AM
The TSP was set up for long term investing purposes as part of FERS employee's retirement package. In fact, all mutual fund companies have restrictions on day traders because their trades force the funds to buy & sell securities and generate fees for all of us vs just those who trade. Thus, either the TSP needs to restrict trading (to protect the many from the fees generated by the few) or they must force the day traders to pay all fees they generate. I suspect that if the few day traders had to incur the costs of their trades, that alone would deter their trades. Why should the many pay the fees of the few?
Trades
NIH
Mon Nov 26, 2007 11:25 AM
If all of these day traders are so successful then a relatively small additional fee ($10-15/trade) to make all of these trades should not even be noticed. They will still make boat loads of money and the rest of us won't have to subsidize their trades.
I also remember similar bragging from colleagues who day traded just before the NASDAQ dropped from over 5000 to under 2000. I seem to remember hearing many stories of retirements postponed or having retirees having to go back to work after losing almost everything.
Remember the Beardstown Ladies' Investment Club? Where are they now?
TSP Traders
USDA Rural Development
Mon Nov 26, 2007 11:37 AM
I don't have any problem with people trading their TSP shares trying to make a profit as "day traders", I just don't want to subsidize their activities. Their trades cost me a "non-trader" money. I have a suggestion for a simple solution: The day traders could pull their investments out of the TSP and set up their own portfolios that reflect the stocks in the various TSP funds. They could then make day trades to their own delight at no cost to me.
They might complain about the costs of trading in this way, but oh well, that would be the true cost instead of me subsidizing their activities.
If this is too radical then I suggest allowing one or two trades per month free of charfge, then charging a fee for additional trades so that all costs are paid by the trader.
Sort of like ATM fees.
transaction costs of frequent TSP trading
usdoj
Mon Nov 26, 2007 11:40 AM
People who trade should bear the cost of same. There is no free lunch.
Set Limits on TSP Day Trading
OPM
Mon Nov 26, 2007 11:54 AM
I am in favor of setting some limits on the "day trading" frenzy because all members of the TSP funds are penalized for the cost these traders create. I think the individuals who find it fascinating and profiting to day trade should open a separate account for that purpose and be responsible for their own cost of operation. Every time there is a weakness in the TSP or some individuals find a way to exploit the system, there need to be regulations put in place to protect the less fortunate. The other option is to let those that want to day trade their TSP funds join a special pool where the cost can be attributed to them alone. Those of us not involve in day trading should not have to share in the cost of managing these transactions. Set the limits and set them fast.
Day Trading on TSP
FDA
Mon Nov 26, 2007 12:06 PM
For years I have heard both schools of thought on this argument and find day-trading on a 401k absurd. Maybe there are a FEW success stories, but overall at what cost? If you want to claim success, do NOT look at the bottom line of a 5-day or 1-year period, instead look at the life of the TSP. Readers said they “made” money, but profit is not realized until you sell. Maybe for a 1-year period you made money, but what if you slipped once or twice over the life of your TSP, those who made $5 million in 5 days may have lost $10 million over 10 days two years ago. What you are really doing is using a retirement vehicle for day trading. If you want to day trade, join E-Trade or Ameritrade and pay the commissions up front. Overall, the brilliance some readers are claiming is hurting others. It is easy in the market to play with numbers and show positive returns. To be realistic and boastful post negative returns or final returns WITH commission!? No jealousy here, just confusion and disdain.
TSP Restrictions
US Forest Service
Mon Nov 26, 2007 12:26 PM
Those who trade on a frequent basis are obviously opposed to restrictions. And why? They can trade at the expense of all TSP participants. TSP was set up for a specific purpose and frequent trading was not part of it. Restrictions should be in place to limit trading to what is reasonable (obviously there's the dilemma of defining "reasonable"); those who want to trade more frequently are welcome to do so...but they would have to pay for it. Why should all of us chip in for others' steak dinner if we're having a caesar salad?
Pay Raiders
VA
Mon Nov 26, 2007 12:28 PM
Charge extra for "day traders." I agree with one respondent who doesn't feel those who "hold" their investments for the long haul should pay for those who "gamble" (frequently trade). What I'd like to know while I sit at my desk eating my lunch and of course, reading this article, what job allows government employees that much time to trade like this? I for one work for my salary and have no time for a 2nd job as a day trader. Maybe mgmt. should watch "pay raiders" a bit more and speculate how some government employees earn their salaries if those employess have so much time analyzing, watching the stock market and trading thier TSP investment(s). Just a thought.
leave it to the PROFESSIONALS
SSA
Mon Nov 26, 2007 12:30 PM
Why don't these "day traders" LEAVE IT TO THE PROFESSIONALS!!! or else pass on the total cost of trading to this "small" group to pay all by themselves!!!
Market Timing and Your TSP
DHS
Mon Nov 26, 2007 12:36 PM
If the TSP day traders want to do it, let them - Just charge them an appropriate administrative fee to cover the added cost.
TSP trading
DOI
Mon Nov 26, 2007 12:47 PM
I support limits on the number of free trades available to TSP participants. Yes, I have made a great deal of money via TSP investing. I'm glad others have, also. However, none of us should be subsidizing those who would make frequent trades in their (typically vain) efforts to beat the market.
Time is the key
USAF
Mon Nov 26, 2007 12:50 PM
I'm quite experienced day trading & have only been invested in the TSP Program for a little over 1 year. I have grown my acc. from $0 to over $30,000 (100%) with max Tax deposit allowed in that time due to my exploitation and knowledge of how the market moves. Time IS my most critical concern since I plan to retire in less than 3 more years (military deposit = 17yrs + 8yrs = 25 Civil Service retirement yrs. Take away my ability to trade my account when market moves warrant then I'm being penalized for my inablity to have the long term investment this program keeps harping on. For those of use in Gov't Service without the advantage of waiting 20, 30, 40 years for our return on Investment (ROI) we are being penalized greatly. The only advantage to this program for a short term investor is the matching funds contributed by the Gov't and my ability to manage my own account. Take away the later, then there is no advantage so I will transfer & manage my account when I leave Gov't service. RO
Re: Time is the key
FDA
Tue Nov 27, 2007 9:45 AM
Re: Time is the key
Retired - USFS
Thu Dec 6, 2007 4:29 PM
Trading or holding
Dept Of Energy
Mon Nov 26, 2007 12:57 PM
I don't know how much I have put into TSP, although it wouldn't take much to figure it out. I have an IRA that I started in the 1980's. My total contribution to that (I quit making contributions in 1986) has been $17,000. Through all the ups and downs of the 1990's and this century, it is now worth a little more than $100,000.
I think I will stick with the slow and steady.
Frequent Trading
USAF
Mon Nov 26, 2007 12:57 PM
Frequent traders should pay for thr right to trade. I don't mind if they trade frequently, and hopefully they are making money doing so, but they should pay for that privilidge. They are increasing the expense ratio and reducing the return rate for less frequent traders. If they are making so much money from their trades they should not object to paying for it as they would have to in any other fund. I only make a couple of rebalancing moves a year and I object to my return rate being reduced by their frequent trades.
TSP Trades
USAF
Mon Nov 26, 2007 12:59 PM
Why should the majority of TSP participants finance the cost of a minority of TSP participants who are "day traders" and trade on a daily basis ? And, where do they find the time to do this while they're supposed to be working ? ?
Re: TSP Trades
DOD
Wed Dec 12, 2007 1:25 PM
TSP Day-Trading
DCAA
Mon Nov 26, 2007 1:01 PM
TSP and other Mutual Funds are not designed for day-trading - market timing. Although some people have apparently been successful at market timing, they have achieved their success at the expense of all others that have invested in the affected funds by raising Fund expenses and lowering overall returns for the vast majority of investors.
Accordingly, I agree that TSP should limit trades per month per investor, the same as private Mutual Funds do. Policies should benefit the vast majority of TSP investors -- not just the select few that make frequent trades as if they were stocks.
Although the same restrictions should not be made of individual stock trades, the fees for each trade should increase with each trade made during the month to discourage day-trading that causes volitility and added costs. Not to mention that frequent trading in mutual funds not held in retirement accounts causes a volitility that frequently results in capital gains distributions/taxable income.
Re: TSP Day-Trading
BOP
Mon Nov 26, 2007 3:35 PM
They are Index funds that can be bought and sold each day. I have never heard of anyone buying and selling mutual funds daily - where you are paying someone to manage the fund for you?
Re: TSP Day-Trading
FDA
Tue Nov 27, 2007 9:56 AM
So, I agree with you, no one day trades on a mutual fund, and no one should on a index fund either.
Re: TSP Day-Trading
DHS
Tue Nov 27, 2007 3:14 PM
If a fund is actively managed (instead of anchored to an index), it can focus on a number of things. Common examples are a major asset class(Domestic large cap value for instance), a particular sector (energy or health care for example).
Give A Choice
IRS
Mon Nov 26, 2007 1:03 PM
Perhaps for the Day Traders, TSP could set up a cost effective plan for them that wish to trade often-costs being shared by those members. The rest of us won't incur their higher costs on our TSP accounts and for a fair price they that are making more money by trading will be satisfied too.
TSP Trading
DoD
Mon Nov 26, 2007 1:25 PM
It isn't a question of whether one or another person can (or thinks they can) make more money, the question is who pays for the cost of that fact or belief.
The TSP report makes its case well. A very small number of the very many TSP participants are driving up administrative costs for all of us, which means they are costing all of us money. Why should I pay for your investment strategy?
TSP Costs
Western Area Power
Mon Nov 26, 2007 1:26 PM
Those who create the additional costs should bear those costs
surcharges?
Dept. of Defense
Mon Nov 26, 2007 1:30 PM
Those who make big returns by frequest trading should not be troubled by a surcharge for each trade over the TSP Board's monthly limit. After all, it should be considered a cost of doing business for them. But since I don't trade that often, I don't feel I should have to absorb the cost of their frequent trades.
Its All About Freedom
Social Security Admin
Mon Nov 26, 2007 1:33 PM
Your column was excellent and timely, and I would bet that you are right about the rules saving TSP participants from themselves.
But that's how freedom gets whittled away year after year. Other people think they know what's best for other people - and sometimes they do. But that's no excuse to take their freedom away and make choices for them.
Freedom is defined by having choices. The more choices, the more freedom. Less choices - less freedom.
True freedom is the freedom to be stupid. You can teach us, as you are doing very well, but in the end, we must make the choice - or we are not free.
Dave E.
Re: Its All About Freedom
FDA
Tue Nov 27, 2007 9:49 AM
You a smoker, Dave?
Thrift Savings Plan frequent trading
Air Force Reserve
Mon Nov 26, 2007 1:33 PM
Loved your article. As an Economics major in college, your article talks about the same things you learn in economics classes (as I did over 30 years ago).
You pointed out that people who leave their money in a fund (like the I fund) with regular contributions, make more money than those who "guess" the market and make frequent trades. Again, the same priciple taught in economics classes over 30 years ago.
This is my point - you have people making great claims, versus the reality of what really happens (the TRUTH), when you can simply learn about it (again, "it" being the TRUTH) by getting an education!
And as any Ecomonics major can tell you, this is a wonderful country for getting rich. And (pay attention, this is where education comes in), as any Economics major can tell you, there are two ways to get rich in the United States: 1) Slowly, or 2) Not at all!!!
It is not "buy a lottery ticket", or "drink beer" if you don't win.
Brilliant, per usual
Anonymous
Mon Nov 26, 2007 1:54 PM
Hey Ralph, you make an excellent point. For real returns over the long term, day trading is an awful strategy. The research shows again and again that buy and hold is the only reliable way to maximze your return.
This bears repeating:
"As the NCO shouted out in all caps: "PEOPLE WHO KNOW HOW TO TRADE AND MANAGE OUR TSP ACCOUNTS MADE ALMOST $100 MILLION DOLLARS IN FIVE DAYS FROM OCTOBER 19 TO OCTOBER 24...." But any person reading this should note: Anyone who left money in the fund and did not trade would have made even more money than those that sold their I fund on the 24th."
Good on you for your excellent example and for being a voice of reason & intelligence.
Re: Brilliant, per usual
VA
Mon Nov 26, 2007 3:31 PM
limiting transactions in TSP system
National Park Service
Mon Nov 26, 2007 1:55 PM
Mr. Smith,
your article on Nov. 26th was thoughtful and reasonable. You make a strong case and I hope many people will benefit from it. Those of us invested in the TSP will only benefit from restricting the amount of transactions.
TSP restriction
Treasury
Mon Nov 26, 2007 2:11 PM
I'm not an advocate for day trading with retirement plans, however, has anyone considered the participants right to invest and manage their retirement plan. I find that two trades per month is going too far with the control of our investment. If transaction cost are a problem, charge a fee and make a profit like e-trade, but don't hold my account captive to your management. The reason is simple......it's not yours to hold.
limiting frequent TSP trading
none- retired from DOD
Mon Nov 26, 2007 2:12 PM
We live in a free market economy. If frequent trading by the few costs everybody more money, the answer is to charge those frequent traders for "excessive trading", say $5 to $7.50 per transaction over some amount, say for every trade in excess of 3 per month.
This is fair. It is NOT FAIR to prohibit frequent trading. Our President's name is George, not Vladimar, and thank goodness we do not live in a socialist or a communist society. So, we should still allow frequent trading.
While I'm on a roll, the TSP should buy the technology necessary to permit trading up until say 5 minutes before the markets close. It is STUPID, repeat STUPID to restrice a trade deadline of 11 a.m. in New Orleans (home of the TSP bureaucrats), i.e. 12 noon in New York, considering that the wall street stock market does not close until 4 p.m. in NYC. This prohibits TSP participants from selling their stocks when they can see shortly before the market's close that they have appreciated in value!
Re: limiting frequent TSP trading
Dept. of Labor
Mon Nov 26, 2007 2:54 PM
TSP Frequent Trading Fee
Air Force
Mon Nov 26, 2007 2:46 PM
If people are making money by frequent trading, they can pay for the privilege. If they're earning enough to make the effort worthwhile, a small fee shouldn't be an onerous burden for them. Those of us who believe in letting dollar cost averaging work for them shouldn't have to subsidize the Attention Deficit Disorder investors. Rebalancing once month is more than enough.
Limiting the Number of TSP Trades
GSA-PBS
Mon Nov 26, 2007 2:52 PM
I believe "stay the course" with minimum trades is the way to go for long term investors. By allowing a few TSP participants to perform unlimited trades, the overall return is lowered for all, and I very much doubt that in the long haul, this "so-called" get rich quick method is in fact, a viable way to maximize return on investments. For one thing, the trades follow a 1-2 day delay, and as volitile as the market is now, the traders absolutely cannot predict what the market will do on a day to day basis. In my opinion, diversification and staying the course for the long run is the better strategy. I would be in favor of limiting the number of trades in a given period of time so the administrative costs would be lower, resulting in higher returns for the rest of us who don't necessarily believe in gambling our future resources away with untrained and unsupervised speculation. If the professionals cannot predict the market with certainty, the amature traders are in fantasyland.
CHARGE US MONEY - PLEASE!!!
FAA
Mon Nov 26, 2007 2:54 PM
Simply charge us for trades above and beyond 2 per month.
$15 should cover it.
When I was doing this I made well over $1000 per many trade (above and beyond what I would have made had I let it ride). Sometime I lost a bit, but it's my money.
I ended up $10k richer by doing this.
So please, let capitalism work it's magic, and charge folks for the service they desire. If they want it, they will pay.
Socialism and Communism would have us limit what we can do, and have the group think as one. Let us be individuals.
We're a capitalistic society, and should be given the freedom to pay for whatever services we desire.
Lower Investment Costs for All
USFS
Mon Nov 26, 2007 3:01 PM
A small number of people are driving up the transactions costs for everyone in the TSP by trading their funds frequently. I say to them, go for it! But if they speculators are making out so much in the market let them pay, as they gladly ought to, for their transactions. Glad for new policy issued by TSP. Keeping the costs down in TSP is keeping this plan like none other.
TSP trading
VA Medical Center
Mon Nov 26, 2007 3:11 PM
I totally agree with your article. I have been participating in various funds through various companies and have met several different financial advisors from different investment firms. What you advise follows what they advise and what I have observed through the years. I believe we should be able to move monies but there should be a restriction on this. I really don't like having to pay for a few who want to play Russian roulette.
I am in favor of the rule change
Social Security Administration
Mon Nov 26, 2007 3:55 PM
I am not a frequent trader. If those who are trading frequently cost ME money then the rule needs to be changed. If, as they say, they make lots of money frequently trading, then they should be happy to pay the costs of making those trades rather than being outraged at not having me to subsidize them any more. It is I who should be outraged not the frequent trader who is freeloading off of me.
let them pay
NASA
Mon Nov 26, 2007 4:02 PM
If the frequent traders are making as much $$ as they claim, they shouldn't mind paying for the convenience. ('real traders' do)
Otherwise, there are lots of places they can take their constant trading.
Those of us who don't cause the extra cost shouldn't have to pay for those few that do.
The TSP was never intended for frequent trading. I doubt they are making that much $$ there anyway. If they were, I think they'd be trading with the big guys. [ 'real traders' aren't wasting their time & money in TSP's indexed funds -- they are out where you can make really big $$].
I have to admit that I get a good chuckle reading the recommendations from the various 'tsp traders' sites.
TSP day traders
VA
Mon Nov 26, 2007 4:03 PM
TSP just needs to charge the people that exceed a maximum number of trades a fee. And that fee should be enough to pay 100% of the TSP cost of the trade, not just offset the cost. It doesn't make sense for the rest of us to bear the costs of these wannabe Warren Buffets. Who, by the way, doesn't think he knows enough to time the market.
With respect to TSP/401K funds, most financial experts seem to agree that you should have a mix of funds that you're comfortable with, and then occasionally adjust this mix to maintain the percentages you desire.
financial management
USAF/USAFR
Mon Nov 26, 2007 4:54 PM
All I have to say is, look at the three years these funds made no money at all. If I can manage my money better than the so-called "experts" stop paying them and start paying me. Maybe the 3000 can provide insight into what may be going on behind the curtain and make us TSP participants money instead of crying about it.
Re: financial management
DoD
Mon Nov 26, 2007 5:46 PM
Pay to Play
TSA
Mon Nov 26, 2007 5:58 PM
I have no problem with people moving their money at will, I do have a problem paying for them to move their money at will. If people want to "day trade" or "play the market", I say let them, and let them bear the full cost for their transactions. If they are making that much off their moves, they should be happy to pay full price to do so.
TSP Trading Limits
GSA
Mon Nov 26, 2007 6:33 PM
Good for the TSP. This is a change that should have been made long ago. A few people can claim tremendous returns from their trading. The rest of us can be skeptical of their claims. The "Recommendation on Limiting Frequent Trading" document ought to be required reading for TSP participants.
TSP trading frequency
DOD, MCTSSA
Mon Nov 26, 2007 6:38 PM
OK as long as it does not cost "me" additional fees. Let the trader pay the fees.
Market Timing and Your TSP
IRS
Mon Nov 26, 2007 6:43 PM
Where is the Securities and Exchange Commission? How do Federal government employees get away with market timing in the TSP while trading restrictions are so widely implemented in most retirement plans? My prior employers had severe restrictions, such as allowing changes in or out of the international funds only once every 60 to 90 days.
THE GOOD OLD DAYS
VA
Mon Nov 26, 2007 7:19 PM
I'm sure that the majority of folks who have issues with more frequent changes yearn for the good old days when we had to have our changes in by the 15th of the month so they would be effective by the end of the month.
This proposal is a HUGE increase over the old days....you will now get to make 2 trades a month...semi-real time!
Such a deal, especially after we, the TSP participants, paid for one aborted computer system, one that works, and will be paying for an even grander system in the near future.
Personnally, I'd like to see a strict accounting of this issue as well as other proposed high dollar value activities the Board plans..... Oh! I forgot...we never will, since it appears the Board does not feel we're smart enough to deal with issues of this magnitude...they will continue to make changes under the cover of darkness despite a perfectly good website they could proactively use as an open information outlet.
Market Timing and Your TSP
mms/doi
Mon Nov 26, 2007 8:24 PM
How often and how much has the Fed (Uncle) borrowed from the TSP funds?
I am not a "high roller" like the small percentage of investors who profited from the I Fund, but I would like to have the opportunity to make $ by transferring my funds more than 2x a month without penalty.
Why segregate out a few thousand TSP investors who profited from the I Fund? Better to charge a flexible rate depending on the trading volume monthly, quarterly, semi-annually, or whatever suits your fancy. I can't be that much considering the number of TSP investors. Tom estimated that by spreading the costs it would be less than $10 per year.
I do not care for your "changing the rules as you play" type of managing funds style. It is poor planning on your part or the TSP managers part. Rules should be outlined up front before TSP creation and not changed to suit your fancy.
Couldn't be better stated!
SSA
Mon Nov 26, 2007 9:56 PM
This really sums it up all! I think we have to stay focused on the prize at hand. We all are looking for the best bang for our buck, and we really all must agree that limitations is the benefit of the whole TSP community. All of you who are bragging about you day trading are not being honest with yourselves or just haven't been day trading long enough to realize the losses! TSP investing really is a marathon for most of us, and not a sprint to the finish line of retirement. Although, many might be in the catch up mode, most are not!
Trading as a Free Good
Department of the Army
Tue Nov 27, 2007 2:18 AM
Whenever people get something for nothing, someone else pays. Daily in and out trades are not about investing; they are about speculating. If a government employee wants to speculate, he/she should be able to as long as transaction costs are paid. Personally, I consider myself an investor. I rarely move funds. When I buy or sell stocks from my brokerage account, I pay a transaction fee. I object to speculators bidding up TSP overhead and pay nothing.
Sour Grapes
FAA
Tue Nov 27, 2007 6:18 AM
My last word on Day Trading.
99% or research is done after work.
4 quick glances at selected web pages first thing in the morning (I waste 5 minutes doing this, you waste 5 minutes getting coffee - I detest the stuff).
4 quick glances again at lunch, then make the trade before noon.
It takes up all of 10 minutes of your work day, so NO productivity is lost here.
(I see the smoke breaks and football talk waste more time each day)
Please don't limit our freedom, just charge us by the trade ($15 is OK).
And YES, most of us are honest with gains and losses. My $ was the result of many good trades coupled with several bad ones. Nobody's perfect, but ...
...what is wrong with us deciding on what to do with OUR $?
Please, no sour grapes from those who are opposed to it. Just because you choose the safe, easy route, don't impose your 10% annual returns on us.
Jealousy over over those making higher rates or returns (even though we work for it), is not right.
IFT
DoD
Tue Nov 27, 2007 7:21 AM
It's to bad that you are so closed minded that you can't even get your head around the idea that some of us Feds can educate ourselves and beat the so called experts. You've just turned into a lackey for party line and no longer represent the federal employee. You really need to expand your horizon's and just see what these so called market experts have as an educational background.
Re: IFT
DoD
Tue Nov 27, 2007 9:00 AM
Of course, that does not make him as knowledgeable about finance and investing as a civil engineer. Just because no one else has been able to reliably predict the future of the stock market, you should be able to base on your confidence and sustained experience as a TSP investor.
Perhaps the writer of the article was trying to help most TSP investors by pointing out the obvious failure of any experts to win by timing the market. Perhaps you will have better success and will soon find yourself leading a mutual fund company based on your demonstrated ability. Why do you want to insult the rest of us inferior feds? I am sure your long term success of beating the rest of the world's financial experts will speak for itself.
Re: IFT
FDA
Tue Nov 27, 2007 10:12 AM
Also, if you can explain how I am a government lackey, walk a party line, and how I have become downtrodden by my 6 years of government service just because I don't want to pay for your day trading, I would appreciate it.
Expand that horizon, son!
TSP Day Traders
USDA
Tue Nov 27, 2007 9:08 AM
I don't begudge anyone who attempts to enrich themselves with their own funds; unfortunately, if the minority are the basis for increased costs for the majority, then those frequent traders needs to bear the true costs of their actions.
It isn't fair nor logical to expect the majority to foot the bill for the minority.
In suml, I'm all for a restriction on the number of trades within a 30-day period (and that would be a total that encompasses all of the TSP funds regardless of how many someone actually has in their individual TSP; e.g., five exchanges/trades).
Mike
TSP Trading
NAVSUP
Tue Nov 27, 2007 2:21 PM
I think charging a fee after so many trades is a great idea and since the traders are making more money they should not have a problem paying it. At least they will not be taking away from my funds for their frequent trading.
Subsidizing Day Traders
DoD
Tue Nov 27, 2007 2:22 PM
All TSP account holders should not have to subsidize the day trading of a few thousand. If folks want to day trade, that is their right, but they should pay a fee for it just like any other day trader pays to his brokerage firm.
restriction on IFT's
US Forest Service
Tue Nov 27, 2007 2:39 PM
Whether someone chooses to buy-and-hold, or make frequent transfers in their TSP accounts is their business, as long as both approaches are permitted (they are) and neither approach is causing major problems for the TSP as a whole. Even with frequent trading by a small number of folks (3,000 people out of 3.8 million TSP participants, according to TSP), overall expenses for managing the TSP remain very low - about 2 or 3 basis points overall. That is less than 1/20 the expenses of the average mutual fund. So what is the problem here?? I don't need paternalistic so-called experts telling me that it would be better for me to not trade my account!! I can make that decision for myself, thank you, and it is MY MONEY after all. I agree with a previous poster that the FRTIB should be subject to a recall for this outrageous proposal. Get some people in there who TRULY represent the rights of TSP participants.
trading TSP accounts
USDA Forest Service
Tue Nov 27, 2007 2:46 PM
Sure, people would have made more money by leaving their money in the I fund until October 31. But yesterday, the I fund closed at $24.37, nearly $2.00 down from the October 31 price. Why didn't you include that piece of information in your article?
Sour Grapes
VA
Tue Nov 27, 2007 3:38 PM
Glad you are willing to pay your freight. Just be aware that winning streaks are just that. See the TSP Articles Archives from Jan-03 re "Market Timing" and how the herd did in the ups and downs. The article gives $ amounts in and out of specific funds with the dates of peaks and valleys. Other past articles deal with emotional trading. MOST timers lose over time. The Aesops Fable re the ant and grasshopper has a grain of truth. Hope you are the exception but a word of caution to the other grasshoppers out there.
The TSP Board allows frequent Trades
FRCE
Tue Nov 27, 2007 9:00 PM
Comments on both sides of the issue. What I can't understand is why are we frequently trading funds, because we can? Why can we? Because the TSP has allowed us to. Why did they allow us to? I don't know they are the so called experts. Why didn't they start extra fees from the start when they allowed frequent trades? Again I don't know. I do know this they were the experts they allowed us to utilize what they gave us and some of us did. Everyone doesn't agree with the extra fee's but some of us do because we feel we should be held accountable for our actions. The great minds and the TSP board should have known that they just couldn't allow us frequent trades then expect us to just look but not touch. We didn't make the rules we utilized what they allowed us to do. If there are limits which I don't agree with but if there is to be a limit I am for (3) free trade not limit me to two and extra fees for any and all additional trades. I don't expect anyone to pay for my trades.
Market Timing and My TSP
DOD
Wed Nov 28, 2007 10:01 AM
How difficult is to understand that what is driving the TSP administration cost up are all the daily interfund transfers of the half million participants on the L 2040,
L 2030, L2020, L2010, L-Income (ALL L-Funds). Their accounts have to be balanced on a daily basis through out huge Interfund Transfers... The TSP Board made a mistake in creating the L-Funds and now they need escape goat to blame... "3000 Day Traders" who do IFT frequenlly to protect and increase their TSP retirement accounts. PLEASE PUT THE BLAME WHERE IT BELONGS !
I AM VERY SUCESS BECAUSE I GOT WORKING TRADING SYSTEMS AT HOME BASE ON NEURAL NETWORK ARTIFICIAL INTELLIGENCE WHICH DO PROGNOSTICS BASE ON PATTERNS RECOGNITION... AND I SHARE THE PROGNOSTICS FOR FREE AT THE TSPTALK.COM
Re: Market Timing and My TSP
DoD
Wed Nov 28, 2007 12:52 PM
"escape goat" instead of scapegoat?
"I AM VERY SUCESS" instead of I am very successful?
"BASE ON PATTERNS RECOGNITION" instead of Based on pattern recognition? This is basic high school grammar.
Aside from that your assertion that there are thousands of daily IFTs in the L funds is wrong. Each L fund is rebalanced within itself. Everybody who is in that L fund gets a share of it, the individual shares themselves are not rebalanced.
Market Timing and My TSP
DOD
Wed Nov 28, 2007 10:04 AM
How is it possible that TSP participants who, perhaps, have little experience compared to professional investment traders can make money by engaging in frequent trading?
DO YOU TRUST THE PROFESSIONAL INVESTMENT TRADERS WITH YOUR MONEY ???
SHAME ON YOU ! ! !
TSP Trading Limits
USDA Forest Service
Wed Nov 28, 2007 4:02 PM
If those people are making so much money trading, then it should not be a problem for them to bear the cost of their frequent trading. It's like paying fees at campgrounds, those who camp pay for the upkeep.
TSP Fund Timing and Transfers
Navy
Thu Nov 29, 2007 4:42 PM
I disbelieve 3000 of 3.6M investors are the only ones involved. EVERYBODY I know switches three to five times monthly. I am up 8% in my TSP since January in a number of funds, simply because I ducked a number of downdrafts, and I am diversified, meaning in genuine Wall Street gibberish, who knows what goes up or down when? With the FOMC printing money like it is going out of style, the liar loans crashing mortgages, housing tumbling a second time after rolling over, you have to be nimble and keep your sanity. I wouldn't mind paying a fee to save my life per "trade" over two to three a month transfers. Anything else is paternalistic crap.
By the Way, on other Annuity Trading Platforms
Navy
Thu Nov 29, 2007 4:46 PM
AXA-Equitable has a program guarenteeing an annuity based on guarenteeing 6% a year and unlimited trades between fifty funds. Whoever says such programs don't exist is feeding you and everyone else pap.
By the way, the easy way to have unlimited trades is so simple. Just charge a small fee, and balance cost with an added stipend for those who DON'T trade.
Incentivization America. That's the answer to paternalism.
Cherry Picking Data
DLA
Fri Nov 30, 2007 6:19 PM
I noticed you pulled some prices and did a little research for the days sited as examples for participants trading into and out of the I-Fund. You then go on to state the closing price on October 31 to demonstrate the profit that would have been made if the investors had maintained their shares in the I-Fund.
I took a look back at that price and those since. I couldn't help but notice that you chose the highest closing price since that time on 31 October. If you want to lend more credence to your article, you might want to keep from cherry picking data to present your case. You may even want to present an objective viewpoint in your articles as opposed to parroting back anything supporting your position.
Re: Cherry Picking Data
Dod
Fri Nov 30, 2007 8:13 PM
The reality is that market timers don't do well over time as indicated by the article. Whether the writer picked October 31 or Nov. 31 or some other arbitrary date doesn't make much difference in the long run. In this case, the initial dates were picked by the TSP because of the heavy trading (and expenses for all TSP participants) on those particular days. ONe guy apparently wanted to crow about the fantastic returns of the market timers but ignore the money they would have made if they had just held on.
The bottom line is that the frequent traders are costing the rest of us money while they gamble with their retirement funds. Everything else is smoke and fog to cover up this reality.
Re: Cherry Picking Data
US Marshals Circus (Service)
Sat Dec 1, 2007 5:38 AM
1. Who cares if day traders do well. It is their money.
2. If in fact day traders eventually lose, there should be no problem. Their funds will simply be traded away and there will be no more transfer costs to worry about.
Do you realize with regards transfer costs, we are not talking a drop in the bucket, we are talking a drop in a swimming pool?
This is a perfect example of fixing something that is NOT broken.
Re: Cherry Picking Data
DON
Mon Dec 10, 2007 3:00 PM
S&S
Good old newsletters and pros
Navy
Sun Dec 9, 2007 2:17 AM
I think you're comparing apples and oranges here. On the one hand you have examples of "professional traders" and newsletters having limited gain from frequent trading. On the other hand you have people trading their own money making large returns. Between these two, you emphasize the professionals, claiming to buy/hold, and ignore the huge daily trade volume (outside TSP). My question is: If I can make above 13%, why would I sell my opinion (i.e. become professional trader or newsletter). 13% is more than enough to retire/live on, and I can focus my efforts on quality of life, instead of chasing another paycheck. If I can't make 13%, maybe being a "professional" or writing a newsletter would be a good way to generate income. Theres all kinds of "trade stories", i.e. take out the top 10 return days and you don't have any return. But these stories don't really provide guidance, except to leave the money in hands of "pros", who work at "managing" money, instead of making it.
Frequent Trades
DOJ
Mon Dec 10, 2007 3:14 PM
Let them trade, and let them pay they cost. However, those who use the L funds should also bear the cost of daily trading as well, as their accounts are rebalanced daily.
By the way, what is the actual cost per trade?
TSP investors are afraid
NA
Mon Dec 10, 2007 10:33 PM
I have read these comments and some of you are makin g me sick. The tsp board is about to take your freedom away and your letting them do it.
Some of you have mentioned "Dollar cost averaging" or "buy and hold" If you believe in those strategies you are AFRAID to manage your own money. Stop being afraid.
People who trade in and out of the tsp are making money hand over fist. Look at tsptalk and the various trading systems. They are making double or even triple the amount of "buy and hold"
To those of you who said "why should we pay for other's transactins" Most of the frequent traders want or are willing to pay a fee. The short sided board won't give them the option.
Don't believe the propaganda spread by the board. They are just trying to scare you. Remember back when they said that the tsp was better than the government pension. You even had the option to switch. For those of you who are too young (google it). When has the government done anything to help you?
Re: TSP investors are afraid
DoD
Tue Dec 11, 2007 2:59 PM
Intelligent market timing will yield good returns. Ill-informed market timing will yield poor returns.
Intelligent buy and hold will yield good returns. Ill-informed buy and hold will yield poor returns.
What really matter is that you know what you're doing with whatever approach you take.
Real TSP Purpose
Army
Tue Dec 11, 2007 11:51 AM
For everyone's historic perspective, TSP was started (and CSRS abandoned) to pump huge and consistent (payroll deduction) cash into commercial marketplace. Big business lobbied and was rewarded by Congress; then and now this money has provided jobs and financial support to American financers. Many businessmen salaries are paid from the TSP "overhead,” and distribution of said overhead is ample given steady payroll cash input continues as has been. So don't get all patriotic and teary eyed when the funds managers tell you how “long term security” is what Congress intended, because yes that was what Business and Congress intended. Yes, to have Federal workers forced to put a goodly part of their Payroll into marketplace coffers, to use as they intended; keeping the masses just happy enough, but not having "individuals" make waves (or far exceed TSP management’s nominal average yield).
So bottom line: TSP was established to input Federal cash into Business (not make Fed workers rich!!). So sit back down, Congress knows what they want(ed), and you are never on the Board.
Re: Real TSP Purpose
dfas
Tue Dec 11, 2007 4:36 PM
Look at the big picture if you really want to know how things work.
TSP board propaganda and lies
NA
Tue Dec 11, 2007 5:09 PM
The Tsp board wants you to "buy and hold". But it's not always the best option. You should have a choice. This is my point. Don't be afraid to take control of your finances.
The Tsp board members will probably get promotions/ raises in salary by minipulating the facts.
Please don't be fooled. They are using buzz words/phrases like "gambling with your retirement to make you mad and agree with them.
Here are 2 events for everyone to think about.
"The tsp is better than a pension CSRS"
"Oursourcing government workers to contractors is a great thing. You can save the agency money"
The above statments are LIES. They hurt government workers.
Here is another lie.
"Trading in and out of your Tsp is wrong"
Consider that you are being lied to again, just so some board members can get high evaluations on their performance standards.
Botton line. You are losing your freedom and some of you won't even know it until it is too late.
TSP Trading
Air Force
Wed Dec 12, 2007 2:15 PM
The TSP was never meant for day-trading. It wasmeant for long-term growth of your investment, thus the L funds were established to SLOWLY change the distribution of your funds. If you change more than once a month, you should pay for it. You are cutting into my returns by your trading. If you wish to speculate, use short-term money that you can afford to lose, not long-term money destined for retirement.
Playing by the rules the TSP Board established
NOAA
Mon Jan 7, 2008 12:07 PM
'TSP is not designed to be an account for frequent trading of funds.'
Why did the TSP board enable daily interfund transfers in the first place then?
People managing their own TSP accounts are being villified as 'frequent traders'. In actuality, they are playing by the rules that the TSP board established.
Limiting TSP Trades
DOD
Tue Jan 8, 2008 9:02 AM
Instead of limiting the number of trades why not charge for each trade? Or maybe charge for each tade over two? Companies that trade stocks on the internet make money, not lose it. This would allow users to trade funds if they wished and lower transaction costs for everyone else.
Frequent Trading
Navy
Thu Jan 10, 2008 5:52 AM
The reasons for trading frequently are: a) TSP rules permit daily fund transfers, b) potential for return higher than the other funds, c) my TSP balance is several times my annual income, so it is beneficial to optimize the return, d) I need time to develop skills for managing those funds during retirement. The reasons that I continue are a) I have obtained higher returns, b) I learn how to analyze / evaluate the options. I will discontinue when my returns drop below other options. There is no option to transfer those funds out of TSP, so discussions on doing this activity elsewhere are not relevant.
The new rule are not clear. Two IFT a month with additional transfers into G allowed. Does 1% more per day into G qualify under the new rules? i.e. two IFTs, followed by 1% into G, then 2%, etc. Or, does 10% G increase qualify? Or, is the 3rd trade only 100% into G?
My TSP analysis / software development is done at home, on my own time, equipment, software.
Let the frequent pay the cost
IRS
Mon Apr 28, 2008 8:33 AM
If the people who think they can make more money by continually trading their TSP stock them let them do so but ONLY IF they are willing to pay the costs associated with their activity. They may quickly see their profits plummet to a negative number. Also, I don't see how they think it fair that the minority should gain at the cost of the majority.
TSP 30% Marginal proposal
DoD
Tue Sep 30, 2008 10:00 AM
I would like the oportunity to risk up to 30% of my TSP account balance for marginal calls and puts or to buy or sell stocks so I can consistantly add value to my TSP retirement portfolio. I read this year of the possibility of a portion of the TSP transactions being farmed out to minority businesses. Please direct me to a qualified TSP broker! September 30, 2008.