Exposing Long-Term TSP Investors to Risks They Did
Manager IRS Thu Mar 13, 2008 9:49 AM
Why not create a separte TSP Fund for Frequent trader and let them trade as much as they want with a fee attached to it. I can understand their need to make more money, but not at the expense of those who save in the TSP for their retirement. I do not appreciate the fact that these folks are trading constantly and it could bring the value of my TSP account down which I depend on for my retirement.
Re: Exposing Long-Term TSP Investors to Risks They Did
We Need Frequent Trades Retired Navy Thu Mar 13, 2008 9:42 PM
Account holders who choose to manage their TSP account make more IFTs. These members decrease the cost to all TSP accounts, not increase the cost. You have been brainwashed by the FRITB into believing that those who choose to manage their TSP accounts increase the cost to all TSP accounts. The reason the costs decrease is the majority of these IFTs are at a loss to those doing the trade. Where does this money go? They either go to the manager (Barclays) or they go into the pockets of all accounts. The TSP records show that fund costs were less in 2007 compared to 2006. These costs have decreased, not increased as claimed by the FRITB.
Re: Exposing Long-Term TSP Investors to Risks They
Pissed Off TSP Navy Sat Mar 15, 2008 1:58 PM
"I do not appreciate the fact that these folks are trading constantly and it could bring the value of my TSP account down which I depend on for my retirement."
That is a major overstatement. Using the TSP own inflated and biased numbers frequent trading cost each I fund investor .07 percent for 2007. This would mean that if you invested in the I fund (and the I fund is the only identified as the supposed problem) it would have cost you .07 percent to have the freedom to move your money as you please.
Fuddy Duddies frustrate transfers unnecessarilly
William Donoghue W. E. Donoghue & Co., Inc. Thu Mar 13, 2008 9:53 AM
Is Congress acting responsibly "for the purpose for which it was intended?" I doubt it.
Spending is out of control and TSP investment accounts are at greater risk. Stock and bond markets could soon be in freefall and removing barriers for responsible retirement savers to transfer prudently is the goal, not frustrating the savers.
David Walker, Comptroller General of the Government Accountability Office, recently resigned out of frustration with government spending. Medicare Part D alone doubled the National Debt at the time of its passing.
The financial markets (as reflected by the recent market downturn) are reflecting the disastrous consequences of that overspending. TSP investment accounts must be easy to control.
'Boomers are the best-educated generation in human history. They can make responsible decisions. After all, it is their money, not the directors' money.
TSP directors should get with the program, not be fuddy duddies.
Thank you, for the confidence that I can handle my own money. Most government employees have solid educational backgrounds and are capable of learning how to manage their own TSP accounts. Many of us are not "in it for the long haul" as the TSP Admin. would have you believe. Baby Boomers may not be able to recover from the Buy and Hold strategies being forced upon them during this volatile market. Two trades may be enough some months but certainly not in others. There is something really fishy about this whole cost analysis by TSP, the numbers just don't add up.
General Engineer Federal Govt Wed Apr 9, 2008 6:42 AM
'Boomers are the best-educated generation in human history. They can make responsible decisions.'
I appreciate your comments, but I disagree with this one. If you will but read the childish attacks and outright lies (e.g. daytrading the TSP) that are being plastered to this board by those "boomers" who are angry that everyone else isn't losing money like they are you will see that not everyone is capable of making responsible decisions. After all, isn't it irresponsible to attack someone else who makes wiser decisions (and, hence, has superior outcomes) as opposed to endeavoring to improve personal performance?
The TSP board should endeavor to provide on-line tools for each participant to improve themself, and authors of articles such as these here should stop fomenting the preeminence of dark side (self-destructive) behavior.
Market timing?
software engineer navair Thu Mar 13, 2008 9:58 AM
We are constantly told that market timing is not a good idea. This implies that on average moves intended to time the market are in the long run either neutral or negative in effect. THis implies that the effect described in the article, in the long run, would be neutral or positive for us long-term investors.
Re: Market timing?
EE Spawar Thu Mar 13, 2008 10:51 AM
Well, Money magazine had an article a few years back surveying the performance of the top 100 mutual funds. Of those 100 funds, only five bested the S&P 500 that year and only one bested the S&P 500 five years straight. So if the professionals can't do that great a job managing other people's money, how can we do any better? Of course, we have a vested interest--it IS our money whereas the professionals make their money off of the fees we pay them, which is much higher than what the TSP charges.
Exposing Long-Term TSP Investors to Risks They Did
Computer Specialist Farm Service Agency Thu Mar 13, 2008 9:59 AM
When a few investors are affecting the earnings of the majority then it is time to take action. I applaud the action of the TSP management for taking a rapid and postive step to protect the majority of the TSP investors.
Re: Exposing Long-Term TSP Investors to Risks They Did
Aero Engineer DOD Sun Mar 16, 2008 3:57 PM
I appriciate your conviction to stay in the market no matter what. Any losses that result from TSP particapants that watch the markets is measured in pennies a year. Losses that you have experienced by not managing your retirement funds is measured in thousands of dollars. Since 1999 the S&P 500 has lost money for stay in the market no matter what guys. The TSP board is not doing any of us any favors with this change.
Long-Term TSP Investors Unanticipated Risks
TELECOMM SPECIALISTS FEMA Thu Mar 13, 2008 10:08 AM
Isn't it interesting that the TSP folks get so worked up over a few trying to move their move to avoid shortfalls, when the cost on a per person basis is not terribly significant. On the other hand I believe Exposure to Risks we didn't anticipate, i.e., the sub-prime mess are more important to the average TSP investor, particularly since it appears to have started the drop in the market since last October. How do we cope with people who purchase houses they know are unafordable. How do we copy with companies that may have duped buyers.
Did the TSP funds invest in stocks/funds that participated in all the various gee-whiz mortgages companies and packages. If they were watching this situation, it would seem that they should have picked up on the problem and lightened their problem children to minimize "Investor Risks." Do we need some sort of insurance to cover such cases of fraud, etc in the marketplace??
Re: Long-Term TSP Investors Unanticipated Risks
software engineer navair Fri Mar 14, 2008 9:21 AM
The TSP stock funds are indexed funds. Individual stocks are not bought and sold. When are we going to start seeing indictments of the slime that were pepetrating the fraudulent loan transcations?
TSP risks assessment
Equal Opportunity Specialist Department of Housing and Urban Development Thu Mar 13, 2008 10:09 AM
I believe that if we had better money managers, then people would not feel a need to try to become dat traders. Because TSP is part of the retirement program for FERS employees, theey depend heavily on seeing a pattern of growth for their savings. With concerns about social security which is a part of the FERS retirement strategy, people are uneasy about loosing large sums of their savings in a short period of time. I believe the TSP should have a mechanism for alerting the people when they are at greater risks with some of their savings strategies. I aslo believe that people that invested in the Life funds have been dissapointed with the earnings derived from these funds. The message I got was that the Life funds would be safer and gard against huge losses, but see better gains overall.
Re: TSP risks assessment
IT Spec dod Thu Mar 13, 2008 11:28 AM
EO Specialist, two points.
First, one of the main advantages of the TSP is low cost. The money management help you're asking for is going to drive up costs significantly.
Second, lifecycle funds can only be accurately judged over the long term(several years). They haven't been around that long yet.
Limiting tsp transfers
Transp Oper. Spec GM-13 GSA- Retired Thu Mar 13, 2008 10:10 AM
It is MY money and only a minute percentage of tsp participants transfer regularly. The tsp board has ALREADY restricted us over two months ago. This irks me !
Re: Limiting tsp transfers
agent IRS Fri Mar 28, 2008 10:17 AM
TOUGH. We dont want you day traders taking our money.
Re: Limiting tsp transfers
Still Working DoD Fri Mar 28, 2008 12:10 PM
You have every right to control you money, but you rights end when you actions cost me and other TSP holders addtional fees which result from your trading actions.
Why not set-up an account with a online brokerage firm and trade away.
Frequent TSP transfers
Program Leader SSA Thu Mar 13, 2008 10:12 AM
One question comes to mind. Do frequent TSP traders have the option of transfering their money to a self directed IRA without penalty? If yes, then do so and stop complaining. It is obvious they are abusing the privilege of low cost transfers while exposing the rest of us to unneccesary higher risks.
TSP investor risk
Supervisor Department of Veterans Affairs Thu Mar 13, 2008 10:19 AM
Applause please for the managers of the TSP. If individuals with large holdings in the TSP wish to make frequent trades they should have become brokers. That being said I do admit to making occassional trades to reposition my funds into areas that are performing better.
Perhaps the actual cost of a trade should be assessed to the individual making the trade. Everyone would be treated equally and costs could go into the funds.
Editor
HR Specialist DoD Thu Mar 13, 2008 10:28 AM
Yet again, errors in this article are as follows:
1. "We've been trying to tell the TSP Board all along that THERE numbers don't show a problem..." I believe THEIR numbers was meant.
2. it's time for the Thrift Board to rethink their efforts to restrict employee's control of their money.". I believe one period at the end of a sentence is appropriate.
3. The booklet on the TSP from that era stated "Your Plan contributions are invested for your retirement, and you should make your investment decision with this long-term goal in mind." There should be a comma after "stated".
Re: Editor
Planner DOD Thu Mar 13, 2008 2:40 PM
One period at the end of the sentence is appropriate, that is why the term (sic) is in place. It is there to tell you that the mistake is original and they are merely copying the statement at written, mistake and all.
Re: Editor
IT Specialist US Forest Service Fri Mar 14, 2008 11:48 AM
If we're going to edit grammar, the most irritating error in the original article is the use of "try and..." rather than "try to..."
additional costs
Nameless, Faceless Nobody DOD Thu Mar 13, 2008 10:48 AM
It doesn't matter that the cost per trade has gone down. The loss to the other shareholders when the reduced valuation must be divided among fewer shares and the gains divided among more shares is the cost that is born by the other members.
It is simplistic to say that they all could invest in the same fashion. If EVERYONE pulled out on a Friday and went back in on a Monday then the resulting chaos would destroy the long-term purpose of TSP investing.
The few are taking advantage of the many in a fashion that is completely unsustainable if everyone followed their example.
If you are smart enough to truly time the market then go play day-trades on your own with all the fees, wins, and losses accruing just to you. Or form a separate investing club with others like-minded. Don't play here while passing the losses to others. If you leave things alone it will grow well over time for everyone. You're literally stealing your additional gain from the other shareholders.
MORE FRTIB MISINFORMATION
Supv. IT Specialist DOJ Thu Mar 13, 2008 11:17 AM
Where do you and the FRTIB get this stuff? You both maintain that I shouldn't have the right to manage my account as I see fit because it causes "buy and hold" TSP participants to lose more money (which by the way is totally untrue). So, I'm not supposed to manage my account with the primary goal of maximizing gains and minimizing losses, but to insure that all participants lose equally when the market drop? If someone chooses to invest in TSP and then "just let it ride", that's fine. But don't try to scare people into accepting this proposal by saying that frequent trading is costing "buy and hold" investors money.
What about the loss TSP participants took when the FRTIB saddled us with $350 million in cost overruns to implement the daily trading system when the original contractor was fired.
Are they going to do the right thing and reimburse us since the daily trading system is being scraped?
No way!
short timers
Fed Empl DoD Thu Mar 13, 2008 11:24 AM
If you want to trade Day to Day, or Week to Week, thenput your money into an appropriate account. But keep it out of my TSP.
TSP ACCOUNT FOR RETIREMENT.
Engineer BOR Thu Mar 13, 2008 11:28 AM
MMMMM....let me see if you take the $15,000,000.00 that it cost all of us for the 3,000 timing traders and divide it among the 3,000, you calculate that it costs $5,000/timing trader. I believe that this cost should be borne by the inconsiderate timing traders, so take it out of their TSP account and leave the rest of the long term TSP accounts alone so we can also make some money. In other words, the 3000 timing traders should pay for their own folly.
Re: TSP ACCOUNT FOR RETIREMENT.
Federal Employee DoT Fri Mar 14, 2008 8:08 AM
It cost 16 million for the trading expenes for the entire year in the "I" fund.
The I fund is a 26 BILLION dollar fund. That means it cost just 6 CENTS for every one-thousands dollars invested, over the entire year.
Included in that 6 CENTS per thousand invested is the price for the PURCHASES of every single I fund holder, who makes 26 purchases throughout the year (each pay period). And included in that 6 CENTS per thousand invested is the cost of more than 550 THOUSAND L FUND HOLDERS, who have their shares bought and sold for them automatically in EACH DAY's REBALANCING.
At the same time, trading in the S fund actually MADE OVER $$ MILLION PROFIT for you- due to Barcaly's using short-shares.
If you limit Interfund Transfers, you MIGHT shave a penny off that 6 CENTS. MAYBE. TSP BOARD has formally said they don't have a clue what limiting trades will do for costs.
But it will also kill much of that $4 million made from the S fund.
JUST SAY NO TO LIMITS!
Frequent Trades
Supv HR Spec Army Thu Mar 13, 2008 11:43 AM
Additional costs should be bourne by those who frequently trade. While the "TSPshareholders" state that the costs have gone down overall then I can only imagine how much more they would have gone down if the frequent traders had left the accounts alone. If they want to take risks with their money I have no objection. Let them trade as frequently as they like. I do object to paying for their trades.
TSP Transfers
Retired Defense Department Thu Mar 13, 2008 11:51 AM
If you want to be a day trader; pull your money out of the TSP, and day trade somewhere else.
I do not care if the cost is "not that much". The TSP was not designed for day trading. Yes, it is your money. You are free to pull it out and move on, if you do not like the limits.
Re: TSP Transfers
General Engineer Fed. Govt Fri Mar 21, 2008 8:55 AM
I don't think you are correct, sir. I don't think participants are "free" to just pull their money out and "move on" without quitting their job. If that is the case, please give me the instructions so that I can do it. It is times like these when there is a difference between those who "invest" time and energy to understand the probabilities of investment performance and those who do not. Those who do not should formulate some sort of strategy for their resources, and not fall prey to the temptation to condemn those who do. Why not do something useful and constructive with your time instead of ridiculing others for their resourcefulness?
Good luck. And, by the way, one round trip per month is NOT day trading. This is called money management, and this is why nobody is suggesting to put an end to it.
TSP Day-Trippers
eeo manager reclamation Thu Mar 13, 2008 12:12 PM
Pls stop the insanity - my advice to the day traders is "Scott Trade". Also, the last thing we need now is to have the union involved in our retirement!!
Policy change on IFT's
Acquistion Support Technician DoD - DSCR Thu Mar 13, 2008 12:25 PM
I would like to thank the Board on its decision to restrict the few who were causing this problem. That was the right thing to do for the majority. I feel better about increasing my allotment this year. Again thanks. For those who want to play with their money, move to another fund and pay the fees. This is my retirement plan too.
TSP frequent trading
Training Instructor Portsmouth Naval Shipyard Thu Mar 13, 2008 12:37 PM
If the frequent trading cost is being born by those of us who don't do such, then there needs to be a limit (as proposed) on the number of trades per month, or a fee to cover the cost of such trading. This is no different than a broker would do for trading stocks, or a mutual fund company such as Vanguard restricting the number of days between trades. Market timers only do this because it is "free" to them (i.e., no set fee), and could care less about the costs to the rest of the participants (if established). It is only sensible to suggest that large movements of any "share" will affect the price of the remaining shares, but I 'm not certain as to how much, if any.
TSP
Elec Tech in Ops DoD Thu Mar 13, 2008 1:55 PM
TSP called me an abuser for shifting my TSP around so as to cause loss of revenue to other non shifting participants. Is this capitalism or what. After all, I give 10% of my salary to TSP but ony 5% is is matched. What is going on with the other money that we don't get matching for. Who is getting the interest on my other half. I guess I get some of it back but not all. The administrators of the program makes the big money but not us. I made more money last year by changing my stocks than TSP made for me in the last 17 yrs. We are talking about my money not theirs. They are abusers not us. I suppose that they feel they have the right to criticise us rather than their conduct. Thanks.
Re: TSP
Nameless, Faceless Nobody DOD Thu Mar 13, 2008 2:37 PM
TSP works based on long-term gains. You ARE abusing those who use it as designed. Market timing only works for you and those like you, (if it really does in the long run,) BECAUSE others are playing fair. If everyone did the same thing you are doing then the excellent performance numbers go down the tubes. It isn't just the cost of the trades but also the cost in who shares the losses and gains.
Instead of putting your $ in TSP why not send them to a private account at any number of places. I have some of my money doing that as well as TSP.
2/mo is enough to keep up with current issues. In a pinch you have unlimited movement to G that would help protect your investment if the market tanks after you used your 2. What you couldn't do, is quickly put it back if the market moves up the next day...gotta wait. So, your decisions will (hopefully,) be more rational for the long term.
Cost per shareholder
Air Force Manager Air Force Thu Mar 13, 2008 1:58 PM
They are right! The cost PER shareholder is low. As is the cost of welfare PER taxpayer, the cost of our national debt PER taxpayer (and future taxpayers), the cost of social security PER taxpayer, etc., etc.
It is the unfare burden of a few on the many that is the problem. Oh, yeah... I see that it is a "Federal Union Representative" making these "true lies." Well, he's right. But, he's more wrong.
You have to give them credit for trying, though. Just don't give them anything else.
TSP - LOSS OF TRADING ISSUES
MAINFRAME SECURITY PERSONNEL DEPARTMENT OF DEFENSE Thu Mar 13, 2008 2:24 PM
i agree with the union. they are basing their comments on statistics.
it must be healthy for us to trade as we see fit based on the cost to each member going down last year.
We Need An Employee Voice on the Board
Tina Leg. Branch Agency Thu Mar 13, 2008 3:04 PM
The TSP Board wants to have it both ways. So called "frequent traders" are either dopes who are "day trading" by trying to time the market, but losing at every turn, or they're tricksters who stay ahead of the curve with a strategy that makes a sizable profit from the international market reports.
Of course, you cannot day trade in the TSP accounts and even the most "frequent trader" can only effect trades about 22 times per month.
When this policy takes effect and the majority of participants are in the G Fund because they cannot control their money, the Board will bring back the complaints of old that participants are not taking on enough risk.
TSP Frequent Trading
Computer Specialist VA Thu Mar 13, 2008 3:22 PM
Actually, it's a moot point to me whether the costs are declining as TSPSHAREHOLDER.ORG says or not. Either way, the costs are still higher than they would otherwise be if these market-timers didn't make excessive trades.
If these market-timers are making the killing they think they are with frequent trading, why are they worried about paying a few extra bucks for the privilege? I say let them play games on their dime.
Of course, the funny part is that Warren Buffet - who just passed Bill Gates for the richest man in America title, says he doesn't know enough to time the market but somehow these wannabe's do. How's that line go , something like 'stupid is as stupid does'?
Re: TSP Frequent Trading
Federal Employee DoT Fri Mar 14, 2008 11:13 AM
VA Computer specialist said:
"If these market-timers are making the killing they think they are with frequent trading, why are they worried about paying a few extra bucks for the privilege? I say let them play games on their dime."
I could not agree more about paying a few extra bucks. If they charged $10 per trade, it would generate $24 million per year, to cover those costs of $13 million per year. Those who never move would not pay a thing.
But TSP Board is not proposing fees. They are proposing only limits. And they are not allowing anyone to take money OUT of the TSP and move it to a private fund, if you are still employed.
THAT is wrong.
limiting TSP transfers
Forest Soil Scientist USDA Forest Service Thu Mar 13, 2008 3:36 PM
I've not seen numbers that convince me that limiting transfers is necessary. The Board is not giving us the full picture, like how buy-and holders can benefit from the time differences involved in frequent I Fund transfers.
What I'm hearing from the Board is sounding very much like the response of a parent whose child is not behaving as expected. Did the Board not fully consider the results of giving us unlimited transfers in 2006?
Market volatility increased during 2006 and 2007. Those of us who actively manage our accounts make more transfers during such periods. Also, those of us who are within 10 years of retirement can benefit from managing our accounts more actively. But there has been no acknowledgement of any of this from the Board.
By the way, I'd like to know what it will it cost to change the system to restrict transfers.
TSP, IFT's
Mister, Civil Service Worker Dept of Navy, USMC, Camp Pendleton, CA Thu Mar 13, 2008 6:36 PM
If the "many" participants in the TSP are to stupid to get out during a crash, why should I be forced to stay and go down with the ship. I'll bet the captain of the ship got into a life boat long before the rest of us seen the crash coming.
If I make a mistake and get in or out at the worng time, I have nobody to blame but myself.
Please continue to allow frequent trading.
Thank you.
Wake Up!
Programmer Treasury Thu Mar 13, 2008 8:44 PM
The S&P 500 closed at 1469 at the end of 1999. Today it closed at 1309. That's a loss of 11% in the last eight years. If you aren't moving your money around, your account is floundering.
You folks in FERS better do something or you'll be working until your are 75. Unless you are counting on Social Security. Then maybe 70. ;)
Paying a small fee is a small price to pay because your account balance is too important. Don't let them stop you from managing your money. Vote for a fee rather than limits.
Good luck!
Cost of Interfund Transfers
Eng Technician USAF Thu Mar 13, 2008 9:24 PM
I have read over and over in these comments that the Frequent Traders are causing the others to lose money in their accounts. Does anyone know how much money this is? Quote TSPSHAREHOLDER.ORG
"While the number of TSP Participants increased from 3.68 million to 3.9 million, the actual cost of trading per TSP shareholder declined in the year ending December 31, 2007.
Total interfund transfer (IFT) trading costs were $ 4.15 per TSP shareholder in 2006.
In 2007, they dropped to just $3.55 per person."
People this is for a year, and includes everyones IFTs and the costs of rebalancing the LFunds daily not just the Frequent Traders. Do you want to give up your right to freely handle your retirement funds for $3.55 a year?
Re: Cost of Interfund Transfers
Nameless, Faceless Nobody DOD Fri Mar 14, 2008 10:41 AM
Does it matter? In the early days of computers managing bank accounts, some genius figured out that rounding on interest payments was virtually invisible to the account holder. He caused the fractions to accrue to dummy accounts that he controlled. The little teeny bit stolen from many thousands added up to quite a hefty sum. This amount was less than we are likely losing to the frequent traders but was still enough to be called, (and prosecuted as,) theft.
The greater fraction of losses divided among those who stayed and the lesser fraction of gain as those who left return adds up.
If everyone did mass bailouts and mass buyins the whole system would collapse. Since it isn't something that works if everyone does it, it is a matter of a few taking advantage of the many.
The attempts to justify it sound to me like a con artist trying to justify that it is really the "mark's" fault that he was taken. Well, the "mark's" are on to the scheme and will stop it.
inaccuracies
fedworker DOI Thu Mar 13, 2008 10:12 PM
Mr. Smith,
First, the FRTIB has not proposed any fees with IFT limits. Fees were discussed as an alternative at the meetings, but neither the interim rule which proposes limiting METHOD of transfers (not number), nor the proposed rule (limiting number of transfers) mentions imposing fees. The FRTIB most emphatically stated that they decided against imposing fees for precisely the reasons you cite FOR it.
Second, your headline of 2/28 "TSP Interfund Transfers Soar in January" is inaccurate. FRTIB even thanked shareholders for reducing their January transfers, as reported in articles and interviews by FRTIB's Tom Trabucco. I suggest that if you are going to promote FRTIB's propaganda, you at least get your facts straight.
Re: inaccuracies
editor FedSmith.com Fri Mar 14, 2008 6:50 AM
The article notes that the Board is not imposing a fee or allowing frequent transfers and the fee is not being imposed "because it is impossible to correctly assign the exact costs to those who are making interfund transfers." The quote in the article is from the Federal Register notice. The article did not state or intend to imply anything else.
With regard to the other article you referenced on the January TSP returns, the monthly investment report from the TSP stated "Net interfund transfer activity soared in January. Participants liquidated $1.8 billion from the C Fund, $1.2 billion from the S Fund, $2.3 billion from the I Fund and $399 million from the L Funds. The money went to the G Fund ($4.4 billion) and the F Fund ($1.3 billion)." That is from page 7 of the monthly report issued by the TSP--it was not my personal opinion. As far as I can determine, these facts are "straight" (and also accurate) according to the TSP staff members who compiled the report. The underlying figures in the report appear to support this conclusion by the TSP's Chief Investment Officer.
Re: inaccuracies
fedworker DOI Fri Mar 14, 2008 12:36 PM
Mr. Smith,
I must disagree with you. Your article specifically (and inaccurately) states that FRTIB has dediced to impose FEES as well as limits.
Quote:
"The TSP has decided not to allow the frequent trades and to impose an additional fee on those who are frequently trading "because it is impossible to correctly assign the exact costs to those who are making interfund transfers." The board also defends its proposal noting that the proposal to limit trades is "more accommodating than necessary for optimal rebalancing frequency and demonstrably more liberal than the policies of 40 record keepers which use the same processing system as the TSP."
However, I do apologize regarding your February 28 article as I was in error. IFT's decreased in February, not January. Mr. Trabucco's statements are on the web. http://wtop2.com/emedia/109948.mp3
limits
fedworker DOI Thu Mar 13, 2008 10:26 PM
The majority of us actively managing our fund are boomers within 5-10 years of retirement. We are trying to maximize our returns in these last few years because we realized that the buy & hold strategy FRTIB promoted would leave us short of funds in retirement. An audit conducted a few years ago revealed this and the fact that shareholders were not rebalancing their accounts often enough to fund their retirement, so FRTIB decided to allow unlimited transfers. They awarded a contract to modify the system for this purpose, which resulted in no deliverables, a lawsuit, and a $35M settlement, all paid for by TSP shareholders on top of the contract cost. FRTIB then hired another contractor to finish the job at additional cost to shareholders. The majority of shareholders still did not rebalance their accounts, so FRTIB created and promoted the L Funds. This is great for younger feds in it for "the long haul" but is of no help whatsoever for boomers. Limits are a step back.
fees
fedworker DOI Thu Mar 13, 2008 10:33 PM
Those of us actively managing our accounts have no problem with paying a transaction fee for IFT's. If FRTIB thinks 3 IFT's per month is reasonable and costs are the issue, then we are willing to pay for the privilege of IFT's in excess of 3 per month. We suggested this to the Board. 3 transfers per month =36 per year. We also suggested that the limit be an annual (36) rather than monthly limit, this would give us the freedom to manage our accounts in a volatile market. Some months we buy and hold, others we need to make more IFT's. And yes, I outperformed the funds, my annual statement proves it. No, I'm not willing to share it with FEDSMITH because he can't accurately report FRTIB's data. I'm certainly not going to trust him with mine.
TSP frequent interfund transfers
Chief Utilities IMCOM-K Fri Mar 14, 2008 1:58 AM
Event though there has been this fundamental movement to restrict the transfers, TSP has not given participants a wider array of products including reverse EFT's which increase in value during bear markets (come feel this bear market will continue until 2009 through 2012 with some anticipation of a market rise the later half of 2008 due to momentary effect of FED monetary policy). Nevertheless, the cause of market timing or interfund movements is that particpants are trying to maximize thier 401K due to stangnet TSP returns or sideways movements in the market. During an accelerated bull market, partricipants will most likely reduce this behavior and thus less issues with TSP managment on market timing. Arriving from private industry and comparing our historical returns with my former employer, our TSP returns are not nearly as aggressive. I am curious if TSP managment rebalances the type of companies and sectors they are invested in from time to time?
I Fund trading
Program Mgr. USDA Fri Mar 14, 2008 7:36 AM
Why should TSP acct. holders subsidize the trading costs of the I - fund daytraders?
Re: I Fund trading
Active Manager of Retirement Account Navy Mon Mar 17, 2008 5:46 PM
Because they don't. Educate yourself.
TSP trades
Land Surveyor BLM Fri Mar 14, 2008 7:38 AM
Suppose that you are invested in stocks at the beginning of the month and stocks begin to decline. You make a couple of moves to the G fund to save some of your investment. Later that month the stocks begin a rebound and begin a climb. But because you made two moves, into the G fund, you are stuck in the G fund. Your first two moves for the month were to the G and they count as your two moves for the month. The board is not being totally truthful about unlimited G fund transfers, it's not as unlimited as they would like us to believe.
Re: TSP trades
Supervisory IT Specialist DoD Navy Fri Mar 14, 2008 9:02 AM
You would be selling low, and buying high if you did that. That is the opposite of what you want to do!
That is the trap of market timing.
TSP proposed IFT restrictions
Biologist USDA Fri Mar 14, 2008 1:17 PM
All TSP participants should be outraged by this proposal to restrict your ability to manage your retirement funds as you see fit. Retaining the right to make unlimited IFTs does NOT cause the costs to go up for everyone else - TSP is using selective numbers to make their bogus argument. Don't assume what they are saying is correct, folks - do your own research as I have, and you'll see that it costs only about $3/year/TSP participant to maintain your current rights to manage your money as you see fit (and the costs are going DOWN each year, not up). Why would anyone voluntarily give up this right for 3 bucks per year? Wake up folks, and fight this ill-advised proposal!!!
Re: TSP proposed IFT restrictions
Active Manager of Retirement Account Navy Mon Mar 17, 2008 5:44 PM
"TSP is using selective numbers to make their bogus argument."
That is it in a nutshell. The TSP management does not have the data to demonstrate that "frequent traders" are costing significantly more and they are manipulating those who are not paying attention. They are selectively using numbers to enrage the passive TSP account holder - of which the simple minded will fall for.
Re: TSP proposed IFT restrictions
General Engineer Fed. Govt Fri Mar 21, 2008 9:16 AM
I'd like to see the "average cost of transactions per participant per month" which the LIfecycle FUNDs participants rack up to the TSP vs. the "average cost of transactions per participant per month" which the G, C, S, and I FUND partipants rack up to the system. Until some similar accurate measure is provided it is simply unreasonable to suggest that G, C, S, and I fund participants who place IFT orders are creating an "Unintended Risk" for fellow participants. Besides, the market is down about 16% over the past few months, isn't it? Is this an "unintended risk"? Did anyone put money into their account with the intention of it losing 16% of its value over the next few months?
When TSP rules are reformed, they should only be reformed so as to provide greater opportunity for participants to maximize returns from their savings - just the opposite of what is being proposed. Ultimately, lazy whiners would learn that their childish whining isn't doing them or anyone else any good.
I Fund IFT Costs
govperson USDA Fri Mar 14, 2008 10:52 PM
The costs cited by TSP are one-thritieth of the costs of comparable mutual funds, and the costs cited are soley because the Thrift Board sets the price at 4.p.m., rather than waiting until the following morning at 7 a.m. If they did that, roughly 80% of the costs of interfund transfers for the "I" would completely disappear.
Exposing Long-Term TSP Investors to Risks
Retired Fed DoC Sat Mar 15, 2008 10:32 AM
I do not have the advanced expertise of the "day traders" that are complaining and certainly none of the expertise of the Board. I don't know who is correct in this tug of war, or which facts are correct on either side. What I do know is (1) the TSP was designed for a single purpose - a basic simple low cost method for supplementing the Federal retirement plan with a growth component keyed to the economic growth of the market, and (2) the fundamental assumptions upon which this design is based is to spread the risk/reward across all participants by tracking indexes, rather than buying/selling individual stocks, bonds, and mutual funds. The use of the TSP for frequent trades is well outside the bounds of the original design and, therefore, should be avoided. Analogy: A butter knife can be used as a screwdriver in a pinch, but it ruins both the knife and the screw. Daytrade somewhere else! Use the TSP for what its design can accommodate, nothing more. If you need a screwdriver, buy one!
TSP Managment
Chief Utilities IMKOM-K Sun Mar 16, 2008 5:12 AM
Before folks start throwing stones at a few number of market timers, people shoud also start questioning TSP managment to determine if they have been effective in their overall managment of our retirement. It's always convenient to use scape goats when performance measures aren't meant by inaction or wrong action by managment. If you look at thier investments for each fund, the investments practically stay the same. Most people who understand the markets realize that different market sectors will perform stronger or weaker depending on the economic cycle. This could maximize the returns that TSP participants get. Again, people must look at the timing of this annoucment by TSP managment and understand that there is always the story that people aren't being told. I don't think the cost is as high as they state and it is being overally exaggerated to take the heat off thier poor overall managment of our monies. Lets not give up our freedom to manage our own affairs.
Re: TSP Managment
IT Spec dod Mon Mar 17, 2008 12:15 PM
Chief utilities, how have they poorly managed our monies?
Market Timing vs Buy and Hold
Former Marine USPS Sun Mar 16, 2008 11:26 AM
For those of you for the restrictions,i challenge you to try Market Timing.Move just 1% into and out of the F,C,S or I Fund, then back to the G Fund.I will guarantee you will do better in a bear market vs. waiting every 7-8 days for the G fund to pay off.Those who stay for the long haul in the C,S,I or L Funds in a bear market are getting killed.I'm up 2% ytd while most of you are down 9-11% ytd.Why would you watch your money being flushed down the toilet?Don't knock it until you try it.That is your retirement money for you to maximize your returns.Give it a try.2007 annual statement up 20%.
Reply to IT Spec
Chief Utilities IMCOM-K Tue Mar 18, 2008 3:11 AM
Go look at the sector breakdown of each fund and how they are invested. For instance the S fund is heavy in financials, why on earth would you be weighted heavily on the financials at this moment or actually back last summer when the first signs of a financial breakdown was occuring. Another example, take a look at the I fund. They are heavily invested in Japan. Japans stock market (Nikkei) has been performing poorly. It's market has lost 26 percent since last summer. A part of managing funds is to reallocate (move money) into better performing sectors on a gradual basis to mitigate risks more appropriately.
Re: Reply to IT Spec
IT Spec dod Tue Mar 18, 2008 11:39 AM
The funds are indexed based funds, not actively managed funds. Go to the tsp website and it tells you what indexes they're echoing.
You're asking them to act like actively managed funds.
IT SPEC
Chief Utilities IMCOM-K Tue Mar 18, 2008 10:01 PM
Lets say that you are in a particular index. If your index was sinking would you stay in the same companies/sectors or reallocate resources. Yes the funds are based/modeled after indexes but someone has to select what sector and specific companies those indexes are based upon. Which in turn is made up of stocks. Indexes=Stocks!
Also, do you want to spend your managment fees on folks that are attentive to your money or just collecting thier fat paychecks and complaining about market timing. Might as well take your money and invest in EFT's (there is no fees other than a one time buy fee)
Re: IT SPEC
IT Spec dod Wed Mar 19, 2008 8:32 AM
No, someone does not have to select sectors and specific companies. You're not understanding how indexed funds work. They track an index which is a mathematical formula based on quantifiable measures of the market. Management analysis is not part of the process.
This is why expenses are so low for indexed funds, the overhead is extremely low. If you want active fund management you'll have to pay for it in higher fees. If you do that you cease to have an indexed fund, you will have an actively managed fund.
Grow Up!
General Engineer Fed. Govt Thu Mar 20, 2008 8:43 AM
I'm not familiar with the organization mentioned in the article. I am not a "Frequent" trader, but I do believe that one round trip per month should be considered normal for anyone with investments in paper assets. It is utterly foolish to not participate in these investments. Paper is paper, it has zero value; unlike real estate. Just ask the shareholders of Bear Stearns. Only a FOOL would sit idly by when he has money invested in paper assets.
Our money is supposed to track indexes. The C Fund is doing a pretty good job. Full swing from 2/26 to 3/18 shows -7.74%, +4.58% with -3.52% overall; while the SP500 was -7.81%, +4.51% with -3.52% overall. That is satisfactory. The S Fund was -9.42%, +3.57% with -6.19% overall; while the RUT was -10.23%, +5.89% with -4.93% overall. The S Fund performance is unacceptable! The fund lost 1.26% in value relative to the RUT over 1 swing which was less than 1 month in duration.
TSP needs to focus on doing their job. Whiners need to shut up.
Transaction Request Deadline
General Engineer Fed. Govt Thu Mar 20, 2008 8:50 AM
If the TSP was at all concerned with its customers it would allow transfer requests up until at least 1530 hours EST. Forcing requests to be in prior to 1200 hours EST is barbaric, insensitive, and forces the participant to act on partial information.
TSP should conform to the industry standard. Current deadline rule is unacceptable.
TSP Frequent Trading
Process Analysist USAF Thu Mar 20, 2008 10:52 AM
1. Why are people trading when they are probably using Government assets (time & network) while on duty?
2. If you wish to 'play' the market ... set up your own trading account seperate from TSP.
3. Or ask TSP for a trading account and pay tthe trading fees.
4. I suspect many frequent traders are to 'cheap' to set up their own trading accuonts (trading fees), and use the 'Free' trading service provided by TSP. People wanting to squeeze that last penny in higher returns are wrongly working for the Government ... they belong on Wall Street or at a Cassino table.
Re: TSP Frequent Trading
General Engineer Fed. Govt Fri Mar 21, 2008 8:44 AM
Changing the deadline rule for transfers from 1200 hrs to the industry standard of 1530 hrs EST would knock 95% of that out. Those who know the markets well enough to do this successfully have targets and would not be abusing the system. It is unthinkable that the TSP management would reduce the number of trades per month and not fix this glaring, insensitive problem with the system. Until they do they deserve none of our respect.
ENJOYING ROCKY MOUNTAIN NAT'L PARK
General Engineer Fed. Govt Fri Mar 21, 2008 9:45 AM
Hi, Mr. Smith
I'm really enjoying Rocky Mountain National Park with my family during Spring Break. Coming here is a freedom. I didn't have to come here, but I chose to come here. It is a freedom. It cost me $20 for a pass which is good for 7 days. Those who wanted to save $20 could choose to stay at home - that is their freedom.
What if I want to come back in 2 weeks? Can I come, or must I wait until next month? The park entrance fee is another $20 if I'm allowed; and, of course, I am.
I guess I could sit at home and WHINE about someone else coming to Rocky Mountain Nat'l Park while I sat at home watching TV. What good would that do me or anyone else?
Tell the TSP to just charge the $20 fee for IFTs, move the deadline from 1200 hours to 1530 hours EST, and lets get on with life.... Let those who want to watch TV watch TV - it's their freedom. Giving whiners an audience doesn't do anyone any good.
Money Management 101
Strategic Communications DOD Fri Mar 21, 2008 9:55 AM
Based upon what I'm reading in the various comments, it appears that there's a difference in knowledge level between those that manage their accounts daily and those that do so with much less frequency.
While I don't "day-trade," I do shift btwn funds based upon the dynamics of the market.
Instead of limiting the number of trades, why not consider providing additional resources to help educate less knowledgeable investors? Ultimately, that would benefit EVERYONE invested in TSP.
Someone with time and market accumen might consider developing an online resource to help assist less knowledgeable TSP investors in managing their money.
If, at the end of the day, the "day-traders" are assessed a nominal fee, so beit. Not much different (and probably a lot less) than buying/selling on Etrade or other online brokerage.
Daytrade
Chief Utilities IMKOM-K Sat Mar 22, 2008 7:47 AM
I keep hearing the word daytrade in the comments. A daytrade is based on one doing one full round trip on the same day. For instance, move to xyz fund from abc fund then back to abc. That is totally impossible in the TSP. As a matter of fact if you put your transfer before 12:00 noon it will not take affect until the following day. Folks..people are not daytrading. I don't know who started this but this is really starting to get out of hand.
Re: Daytrade
General Engineer Federal Govt Fri Mar 28, 2008 6:52 AM
“Folks..people are not daytrading. I don't know who started this but this is really starting to get out of hand.”
Neither do I, but here is an example from the article noted below:
"The money in your TSP is your serious money. It's not play money. It's definitely not appropriate for the fool's errand called day-trading. What you build in your TSP will have a direct effect on how financially secure your retirement will be."
Taking Control of Your TSP Account (Part 2)
By Rob O'Blennis
Wednesday, December 5, 2007
The article proved that hindsight is 20-20, but foresight is not. I totally agree with his next statement:
"What I want you to understand from this article is this: your money absolutely must continue to grow over the next several decades if you have any hope of not running out of money in retirement."
Losing 14% of my savings PRIOR to making further gains - which is what these 2 fund did after the article was published - is not my idea of “Taking Control”.
Frequent Trader Limits to TSP
Analyst NSA Mon Mar 24, 2008 8:40 PM
I'm one of those 3,700+ Frequent Traders. Before I started moving "MY" funds around I was one of the 99% of TSP shareholders who earned paltry returns letting it sit idle. 2007 I nearly doubled the I fund rates by frequent trading. Now I am operating in the 2 or 3 trades p/month limitations and still doing better than the 99% lemmings. I retire very soon so I have already layed the ground work to transition my entire TSP balance into an online account where I can trade as often as I want and up to the last minute of the trading day (unlike TSP which makes you trade by 12noon EST). If I were a younger worker staying with the gov't then I would reduce my max allowable $15,500 contrib's to the NSA matching of only 5% and divert the rest of my retirement contributions to an on-line investment firm that I can manage. Oh...by the way, did I mention that I am retiring 14 years before most of my co-workers because I frequently traded in the TSP and it paid off! TSP board did me a favor!
Re: Frequent Trader Limits to TSP
General Engineer Federal Govt Mon Mar 24, 2008 10:38 PM
And by retiring early, you allow a needy young person - possibly with children - to take your place and have stability for their family. God bless you for your generosity and your super...vision. The world could use a lot more people like you.
Re: Frequent Trader Limits to TSP
Contract Specialist US Air Force Tue Mar 25, 2008 8:55 AM
I'm simiar to you but I have had only 8 years of CS & that + my AD Mil Service will give me a fair retirement. I also frequently trade & I have made considerably more in my TSP Acc. than others that park there money and hope it will grow. I'm so sick of the restrictions and penalties that are thrust upon us for our benefit that I have decided to retire early and transfer my entire account into my own IRA and manage it myself. BTW, DYK that if you had a Brokerage accounts & borrowed against it that the principal remains invested and your account isn't reduced by the amount you have borrowed from yourself. I fail to see how people can stand by and let this abuse continue due to the failures of others. I've made + 250% in my privatley managed account this year alone and will probably triple that by the end of the year. Yes, it requires study, knowledge of the market and some time and effort. BTW, thanks 4 the 5% matching (free money) in my opinion the only advantage to this program.
Re: Frequent Trader Limits to TSP
Project Engineer U.S Air Force Thu Apr 3, 2008 8:54 AM
Great! I am really happy for you. It is wonderful that you are able to actively manage your own money-not like many "passive" investor, (no- I cannot call them investors, more accurate description is buy and hold people) stay idle and watch their hard earned money disappear gradually every day for the last several months.
The U.S is a land of opportunity. We have an opportunity to manage our money based on our own knowledge, why let the TSP Board takes it away? Recently, one of my friends whom I play tennis with, told me that his TSP account has been down significantly since he put (not invest) all his money in the C fund. I asked him why he did not make any trade to protect his account balance? He said, I am lazy and do not know anything about the market.
This is a true story and I honestly do not wish to insult any buy and hold people.
TSP Short Term Pre-Retirees
Lieutenant Bureau of Prisons Tue Mar 25, 2008 2:51 AM
"Don't mess with my retirement ! Don't make me work
longer because of these restrictions ! If your a Long
Term Investors, hit the L-Funds, thats what their for. I'm
a short term (close to mandatory) investor and this is
nothing less then Fraud and Descrimination rolled up
into one big ball of horse hockey. Ask them about the
computer mess-up that cost millions for nothing. IFT's
have been unlimited since I started participating. Now,
while I'm so close to retirement, they want to restrict
me over $3.55 per year. I want to avoid loses and take
a risk for maximum gain. Leave me alone, your more in
my life then any american should have to put up with.
TSP Frequent Trading
Contracting Officer GSA Tue Mar 25, 2008 11:08 AM
What's amazing is that so many federal workers have the time to read and comment on this issue over and over and over. Assuming they are at work while they are researching and studying the market so they will know how to trade their funds, who's doing the work they are paid to do?
Re: TSP Frequent Trading
Supervisor dhs Wed Mar 26, 2008 7:13 PM
"Assuming they are at work while they are researching and studying the market so they will know how to trade their funds, who's doing the work they are paid to do?"
The same folks who are doing your work while you're here posting your comments.
Re: TSP Frequent Trading
General Engineer Federal Govt Thu Mar 27, 2008 5:20 AM
I was on annual leave all last week when I made a few posts, sir. I would imagine most of the others were either on lunch or break when they made theirs. Down markets are upsetting to people who don't manage the risk in their nest egg. I know, I've been there, done that.
Someone once said, "Cast out the beam from your own eye before you worry about the mote in our eyes."
Lets work together to change the IFT deadline from 1200 hrs EST to 1530 hrs EST. That is the solution for waste, if there truly is any. Demoralizing approaches are counterproductive, as you can see from this whole fiasco created by restricting participants' IFT freedoms.
Does transferring large amounts of money, impact t
Engineer John G. DON Thu Mar 27, 2008 7:57 AM
Please help if you can. I have been seeking the answer to this question from official source and have not gotten a good answer. Can the funds value be manipulated by moving large amounts of money into and out of the funds? Or are the funds only tied to their indexes. I am sure it is obvious why I ask this question.
Re: Does transferring large amounts of money, impact t
General Engineer Federal Govt Thu Mar 27, 2008 12:04 PM
Not my responsibility, but I'll try. (Part 1 of 2)
Go to the TSP web site and read the "Fund Facts" for each fund. The info you are seeking is there.
It is found in the "RETURNS, SHARE PRICES, & FUND SHEETS" folder located on the center right of the TSP home page.
Note that the managers say that they only invest 2 ways:
a) Most money is, by law, invested in a particular fund that is designed to track a particular index (e.g. The S Fund is designed to track the DJ Wilshire 4500 Completion index, which has a ticker symbol of DWCP. Note that these stocks are the actively traded "Non-SPX" stocks in the US. As an investment vehicle, the managers say that S FUND investments are invested in the Barclays Extended Market Index Fund (which apparently does not invest in those companies in the index that has a market cap less than $1B US.
Re: Does transferring large amounts of money, impact t
General Engineer Federal Govt Thu Mar 27, 2008 12:11 PM
Part 2 of 2.
B. A "Portion" is retained to take care of daily client activity. This money is invested in the SP400 and RUT futures market.
Futures are highly leveraged and if the trader bets wrong, they lose a lot of TSP money. Vice-versa if they bet correctly. Doesn't say who the traders are or who/where these services are acquired. I wonder why this "portion" needs to be invested at all. I would think that placing these highly risky bets with TSP money (instead of investing) would be a higher concern for the average TSP participant than whether or not their co-worker is fairing better with their own nest egg via IFTs then he/she is by being more passive with their resources. Just a thought!
Re: Does transferring large amounts of money, impact t
General Engineer Federal Govt Thu Mar 27, 2008 10:39 PM
"Can the funds value be manipulated by moving large amounts of money into and out of the funds? Or are the funds only tied to their indexes."
I'm not sure I answered the question, and I certainly am not an official source. My opinion is that money is flowing in and out each and every day. Some days more flows out than flows in and other days more flows in than flows out. Any one investor, or even group of investors, are normally just a drop in the bucket.
Since the investments are made into funds which track the selected index, the value of the fund will rise with capital gains (stock prices going up) and with dividends received, and will fall with capital losses (stock prices go down) and with fund management fees deducted. The value of the fund is viewed on a "per share" basis, not the aggregate value of the fund; so the quick answer to your question is "no". The value of the fund is really not relevant to individual participants, rather the "per share" value. Hope this helps.
Restrict market trades
Program Analyst VA Tue Apr 1, 2008 12:24 PM
YES, the market trades should be restricted...I'm the one who let my money ride, thinking the TSP would turn around. I haven't been hurt very much, around 4,000.00. If I'm doing the wrong thing, I sure would like to know about it! I'm getting more worried every day, but it will take alot to get me to transfer my money because when it does turn around, it will cost me more!
Against day trading
AUdiologist DVA Tue Apr 1, 2008 12:39 PM
THe comments by Jim Pratt, founder of TSPSHAREHOLDER.ORG, fails to consider two important points
So the cost per shareholder is down from 2006. Big deal, I made 6 changes so the cost was $25.00, the guy who market times makes 240 changes a year , cost $1040.00. I pay for his exchanges!
Then there are the other costs to shareholders. As mentioned above "when this small cohort rapidly removes funds in anticipation of short-term market losses, any losses which in fact materialize are spread over fewer remaining participants and are therefore more severe for those who maintain the long-term approach. Those who rapidly shift out secure the higher value based on the closing price for the day, while the remaining investors bear the losses when the shares are sold at he lower opening price on the following business day.
If you want to market time, do it on your own dime. I'm glad the board is watching out for the majority and not the minority.
Re: Against day trading
General Engineer Federal Govt Thu Apr 3, 2008 6:25 AM
THERE IS NO DAY TRADING GOING ON IN TSP.
THERE IS NO DAY TRADING GOING ON IN TSP.
THERE IS NO DAY TRADING GOING ON IN TSP.
Did you hear that? If not, maybe you need an audiogram.
Looking out for the rights of what seems to be "the few" is not looking out for the rights of "the minority"! It is looking out for the rights of EVERYONE who participates in TSP.
Global war on terror.... excellent example. Looking out for the minority is actually looking out for everyone.
Authors of these articles are only fomenting jealousy. They should be educating TSP participants, not instigating them.
240 IFTs a year? Come on, there is a limit now of 1 round trip per month. The TSP trade I exited yesterday on the close netted 4.9% in the brief period I had it in. Get smart instead of angry and bitter at others.
Fuzzy economics
Economist IRS Tue Apr 1, 2008 8:38 PM
All this talk of cost is specious, from the plan that has the lowest costs? SO they want it both ways? Plus, Market, please take an Econ course. A few day traders can't change the market, if so George Soros could do it single handed. I'm just wondering why you are so envious of traders? Portfolio Envy?
I'm against any restrictions. If the costs can be proven, they by golly pass them on.
TSP Board and Managers
Engineer EPA Tue Apr 1, 2008 9:14 PM
The TSP Board and managers are showing that they do not have a full grasp of what normal index funds should be expected to do. How is it that outside of the TSP, buying and selling takes place al day long, such as with ETFs, or at the end of each trading day, as mutual funds do; but the TSP has difficulty with a relatively few people who actively move their funds around. This is incompetence. The TSP should be turned over to a firm or firms who have the ability to handle large numbers of accounts. Clearly, there are many firms that have this capacity and do this each and every day of the work week. TSP flunks.
Re: TSP Board and Managers
Economist IRS Tue Apr 1, 2008 9:59 PM
It's really funny that people think that by holding my money captive they are making profit. Isn't that the converse of what they purport? If my lack of trading makes anybody any money it should be me!!!! SO, why shouldn't I trade MY money for MY benefit. Why do some people want to free ride on MY money. It is MY money isn't it?
Re: TSP Board and Managers
analyst DoD Wed Apr 2, 2008 7:41 AM
"the TSP has difficulty with a relatively few people who actively move their funds around. This is incompetence ... Clearly, there are many firms that have this capacity and do this each and every day of the work week. TSP flunks."
You're wrong.
Most mutual funds (whether index or actively managed) have restrictions on frequent trading for the same reason that's behind the TSP restriction effort. EFTs are a completely different breed, they're not a valid yardstick to measure conventional mutual funds against.
Day Traders
Current Employee DoD Wed Apr 2, 2008 10:12 AM
If folks feel the need to "play" the market, they should do so outside the TSP. Go- set up accounts with firms that permit and encourage this type of activity and have at it especially if you think you can do better in the long term. Key here is long term, not day trading....
TSP Board 's trade limitation
Tuoc Dang U.S Air Force Thu Apr 3, 2008 7:59 AM
The trade limitation proposed by the TSP Board does more harm than help, especially in the current extreme volatile market. For example, my friends, listened to the general investment advise from many "experts", they have used "buy and hold" (made no trade) plan for their TSP investment for the last 3 months. They lost more than 10% of their money.
I believe the TSP Board must reconsider about their propsal. They should allow more trades and be flexible about it, ie. allow the number of trades per year not per month. Since there will be months that people do not make any trade but other months they NEED to make more trades depends on the market situation.
The TSP Board should not think they are smarter than people because there are so many TSP intelligent investors out there. Their wisdom are not less than the board's.
Re: TSP Board 's trade limitation
Supervisory IT Specialist DoD Navy Thu Apr 3, 2008 9:13 AM
You don't lose money unless you withdraw it. Or unless you do an interfund transfer and lock in your loses.
Trading based on the market situation doesn't work.
That's market timing and it's been proven time and time again that it isn't effective.
Re: TSP Board 's trade limitation
IT Project Manager State Wed Apr 9, 2008 9:09 AM
I also have an IRA that I'm free to trade within as I like. However, I'll be charged a variety of fees when I do so. That seems to be the practice with these private accounts, which tells me frequent trades DO cost a lot. Posters to this blog should stop trashing the TSP Board on this issue. The TSP IS the lowest cost program around.
The above suggestion to the TSP Board on being more flexible with the 2 moves per month limit is a good one. How about something like "2 moves per month, or 18 moves per year done anytime"? That should satisfy those wanting to move funds based on their own models (some of which seem to work well).
Re: TSP Board 's trade limitation
Engineer IMKOM-K Mon Apr 7, 2008 5:05 PM
I whole heartly disagree with you. I made 28 percent return on my TSP account last year by properly rotating through the funds and avoiding the downturn loss.
There were market signs of a housing bubble last summer. People just need to wake up and read the news. If were you were more involved and educated about your financial future you would not have made that statement.
There are lots of resources out there to become self-educated and not be passive about your finiances.
Use your head
Postal in transit United States Postal Service Tue Apr 8, 2008 11:17 PM
Funds are meant to be managed!.. You can sit there and lose your thousands of contributed dollars or you can birth some additional brain cells and take an active part in your retirement, within the system. But please-don't critique people that are willing to use initiative and common sense to better their lives. Your long-run type of mentality is just an excuse for laziness and lack of foresight! I have no problem with a twice a month limit on transfers. As for those of you brain-dead folks out there who insist on losing your funds because you are too lame to take advantage of what is offered you, well-I guess you deserve what you get.
Re: Use your head
analyst DoD Fri Apr 11, 2008 12:50 PM
It may make you feel good to call others lame lazy and brain dead but that doesn't contribute anything of value to the discussion.
The fact remains that over the long term (and retirement investing is a long term concept), both buy and hold and market timing portfolios provide similar results when properly managed. Most of the anecdotal evidence cited by folks on this blog is short term (1 or 2 years). It makes no sense to judge a long term proposition by short term results.
Re: Use your head
General Engineer Federal Govt Fri Apr 11, 2008 9:08 PM
DoD Analyst. Even buy & hold has its roots in market timing... Either 'Buy low, sell high' or 'Buy high, sell higher'. B&H makes sense when your investment is trending the right direction; but is utterly foolish when it isn't. Remember, it is your "right" to manage your money that the TSP board is proposing to strip from you.
Maybe some people are angry at having their rights stripped from them, and are saying some unkind things. It all reminds me of the nursery rhyme, "Sticks and stones may break my bones, but words will never hurt me." Well, it's the TSP board that is throwing sticks and stones, and by stealing our right to freely manage our accounts, they are breaking our financial management bones. The unkind words said in response will pass, and prove harmless. That cannot be said about what the TSP board is doing.
Re: Use your head
analyst DoD Sat Apr 12, 2008 10:56 AM
Engineer, you don't understanding the concept of buy and hold. The root of the concept is that temporary swings (such as the trending you speak of) will be overcome by the fact that the equity market always goes up more than it goes down in the long run. Buy and hold portfolios are managed over time, but they are managed to reduce risk gradually as a function of time to retirement, NOT as a function of temporary market conditions.
The concept also recognizes that it's impossible to know ahead of time what the market is going to do in the short term. Many intelligent professionals have tried to predict this sort of thing, yet even they don't always agree. If the intelligent professionals can't always agree (and therefore are wrong sometimes), it's obvious that the everyday citizen stands even less of a chance of getting it right all the time.
Re: Use your head
General Engineer Federal Govt Sat Apr 12, 2008 7:14 PM
DoD Analyst... Buy and hold is not what a retirement fund is all about. Retirement funds are about preparing for your retirement by investing some of your income in a long-term account insead of spending all of it. The authors of loony articles like this one haven't figured that out yet. TSP is supposed to provide protection for all of us - not just those who foolishly choose to sit idly on their hands while a bear market is eating away at their retirement funds; and then blame their losses on those who have had the ingenuity to manage their fund.
There are temporary swings in all market cycles (bull, bear, and range-bound).
Why must IFTs be requested by noon EST?
Why are there no ETFs to rotate into?
(energy, metals, agricultural, etc.)
Suze Orman was asked today about investing in TSP and her advice...."Get out and find a good place to put your money."
The TSP is a cheap, inferior retirement plan with lame management and harsh rules. And it's getting worse!
Re: Use your head
analyst DoD Tue Apr 15, 2008 9:58 PM
You may not like the buy and hold concept but to say that's not what a retirement fund is all about is ridiculous.
Market timing and buy and hold are both legitimate approaches and can both provide well if properly managed. Likewise, both can lead to disappointment if not properly managed.
TSP Management
Aministrative Techican DOT Thu Apr 24, 2008 9:25 AM
I feel it is very dishonest for the Government to encourage us to save our hard earn money, but make very difficult manage it. 1. They are using our saving to do whatever they want. Then charge us interest on the money if we need to borrow from the saving in hard times. 2. I feel that we need to take a vote on the number of times a person may change their account each month, 2 is not enough. 3. There has to be a better way to handle TSP then the way it is held now.
Wake up and smell the money (burning)!
HR Specialist DoN Thu Apr 24, 2008 10:12 AM
All this talk about day trading and costs & all the comments. What about all the "official work time" that these 3,000 or more employees are wasting every day. Aren't they employeed to do a job ???? You can't tell me that these folks do all the trading on their own time!!!! Supervisors/Managers should wake up and consult their HR ER/LR Specialist on how to stop their employees from wasting the government's time and make them do the job they were hired for.
THEY ARE TALKING OUT BOTH SIDES OF THEIR MOUTH !!!
CIVIL ENG. TECHNICIAN NRCS Thu Apr 24, 2008 11:22 AM
they say that a small minority 1% is causing the majority 99% to bear the blunt of the market change. granted i did not go to a major university for math. but it does not take a mathmetician to see the disparity in these numbers. the board has never given us guidance on how to invest in our future, and now they want to help us !!! well thanks !!!!! i'm csrs, but i really feel sorry for the fers folks. they have been left to make their own retirement nest egg.good luck folks !!! ask the board for some guidance and see what you get !!!!
Limiting TSP Transfers
Engineer Bureau of Reclamation Mon Apr 28, 2008 8:13 AM
Up to 2 trades a month is enough for me, I'm looking for more instant results. Used to take days for request to happen, now much faster. An other cost is to the tax payers. Hear of some that come in to the office and first thing look at overseas market results, US market early morning response, then make TSP changes? Who is covering this time?
Exposing Long-Term TSP Investors to Risks They Did
IRS
Thu Mar 13, 2008 9:49 AM
Why not create a separte TSP Fund for Frequent trader and let them trade as much as they want with a fee attached to it. I can understand their need to make more money, but not at the expense of those who save in the TSP for their retirement. I do not appreciate the fact that these folks are trading constantly and it could bring the value of my TSP account down which I depend on for my retirement.
Re: Exposing Long-Term TSP Investors to Risks They Did
Retired Navy
Thu Mar 13, 2008 9:42 PM
Re: Exposing Long-Term TSP Investors to Risks They
Navy
Sat Mar 15, 2008 1:58 PM
That is a major overstatement. Using the TSP own inflated and biased numbers frequent trading cost each I fund investor .07 percent for 2007. This would mean that if you invested in the I fund (and the I fund is the only identified as the supposed problem) it would have cost you .07 percent to have the freedom to move your money as you please.
Fuddy Duddies frustrate transfers unnecessarilly
W. E. Donoghue & Co., Inc.
Thu Mar 13, 2008 9:53 AM
Is Congress acting responsibly "for the purpose for which it was intended?" I doubt it.
Spending is out of control and TSP investment accounts are at greater risk. Stock and bond markets could soon be in freefall and removing barriers for responsible retirement savers to transfer prudently is the goal, not frustrating the savers.
David Walker, Comptroller General of the Government Accountability Office, recently resigned out of frustration with government spending. Medicare Part D alone doubled the National Debt at the time of its passing.
The financial markets (as reflected by the recent market downturn) are reflecting the disastrous consequences of that overspending. TSP investment accounts must be easy to control.
'Boomers are the best-educated generation in human history. They can make responsible decisions. After all, it is their money, not the directors' money.
TSP directors should get with the program, not be fuddy duddies.
Re: Fuddy Duddies frustrate transfers unnecessarilly
VA
Thu Mar 13, 2008 12:40 PM
Re: Fuddy Duddies frustrate transfers unnecessarilly
Federal Govt
Wed Apr 9, 2008 6:42 AM
I appreciate your comments, but I disagree with this one. If you will but read the childish attacks and outright lies (e.g. daytrading the TSP) that are being plastered to this board by those "boomers" who are angry that everyone else isn't losing money like they are you will see that not everyone is capable of making responsible decisions. After all, isn't it irresponsible to attack someone else who makes wiser decisions (and, hence, has superior outcomes) as opposed to endeavoring to improve personal performance?
The TSP board should endeavor to provide on-line tools for each participant to improve themself, and authors of articles such as these here should stop fomenting the preeminence of dark side (self-destructive) behavior.
Market timing?
navair
Thu Mar 13, 2008 9:58 AM
We are constantly told that market timing is not a good idea. This implies that on average moves intended to time the market are in the long run either neutral or negative in effect. THis implies that the effect described in the article, in the long run, would be neutral or positive for us long-term investors.
Re: Market timing?
Spawar
Thu Mar 13, 2008 10:51 AM
Exposing Long-Term TSP Investors to Risks They Did
Farm Service Agency
Thu Mar 13, 2008 9:59 AM
When a few investors are affecting the earnings of the majority then it is time to take action. I applaud the action of the TSP management for taking a rapid and postive step to protect the majority of the TSP investors.
Re: Exposing Long-Term TSP Investors to Risks They Did
DOD
Sun Mar 16, 2008 3:57 PM
Long-Term TSP Investors Unanticipated Risks
FEMA
Thu Mar 13, 2008 10:08 AM
Isn't it interesting that the TSP folks get so worked up over a few trying to move their move to avoid shortfalls, when the cost on a per person basis is not terribly significant. On the other hand I believe Exposure to Risks we didn't anticipate, i.e., the sub-prime mess are more important to the average TSP investor, particularly since it appears to have started the drop in the market since last October. How do we cope with people who purchase houses they know are unafordable. How do we copy with companies that may have duped buyers.
Did the TSP funds invest in stocks/funds that participated in all the various gee-whiz mortgages companies and packages. If they were watching this situation, it would seem that they should have picked up on the problem and lightened their problem children to minimize "Investor Risks." Do we need some sort of insurance to cover such cases of fraud, etc in the marketplace??
Re: Long-Term TSP Investors Unanticipated Risks
navair
Fri Mar 14, 2008 9:21 AM
TSP risks assessment
Department of Housing and Urban Development
Thu Mar 13, 2008 10:09 AM
I believe that if we had better money managers, then people would not feel a need to try to become dat traders. Because TSP is part of the retirement program for FERS employees, theey depend heavily on seeing a pattern of growth for their savings. With concerns about social security which is a part of the FERS retirement strategy, people are uneasy about loosing large sums of their savings in a short period of time. I believe the TSP should have a mechanism for alerting the people when they are at greater risks with some of their savings strategies. I aslo believe that people that invested in the Life funds have been dissapointed with the earnings derived from these funds. The message I got was that the Life funds would be safer and gard against huge losses, but see better gains overall.
Re: TSP risks assessment
dod
Thu Mar 13, 2008 11:28 AM
First, one of the main advantages of the TSP is low cost. The money management help you're asking for is going to drive up costs significantly.
Second, lifecycle funds can only be accurately judged over the long term(several years). They haven't been around that long yet.
Limiting tsp transfers
GSA- Retired
Thu Mar 13, 2008 10:10 AM
It is MY money and only a minute percentage of tsp participants transfer regularly. The tsp board has ALREADY restricted us over two months ago. This irks me !
Re: Limiting tsp transfers
IRS
Fri Mar 28, 2008 10:17 AM
Re: Limiting tsp transfers
DoD
Fri Mar 28, 2008 12:10 PM
Why not set-up an account with a online brokerage firm and trade away.
Frequent TSP transfers
SSA
Thu Mar 13, 2008 10:12 AM
One question comes to mind. Do frequent TSP traders have the option of transfering their money to a self directed IRA without penalty? If yes, then do so and stop complaining. It is obvious they are abusing the privilege of low cost transfers while exposing the rest of us to unneccesary higher risks.
TSP investor risk
Department of Veterans Affairs
Thu Mar 13, 2008 10:19 AM
Applause please for the managers of the TSP. If individuals with large holdings in the TSP wish to make frequent trades they should have become brokers. That being said I do admit to making occassional trades to reposition my funds into areas that are performing better.
Perhaps the actual cost of a trade should be assessed to the individual making the trade. Everyone would be treated equally and costs could go into the funds.
Editor
DoD
Thu Mar 13, 2008 10:28 AM
Yet again, errors in this article are as follows:
1. "We've been trying to tell the TSP Board all along that THERE numbers don't show a problem..." I believe THEIR numbers was meant.
2. it's time for the Thrift Board to rethink their efforts to restrict employee's control of their money.". I believe one period at the end of a sentence is appropriate.
3. The booklet on the TSP from that era stated "Your Plan contributions are invested for your retirement, and you should make your investment decision with this long-term goal in mind." There should be a comma after "stated".
Re: Editor
DOD
Thu Mar 13, 2008 2:40 PM
Re: Editor
US Forest Service
Fri Mar 14, 2008 11:48 AM
additional costs
DOD
Thu Mar 13, 2008 10:48 AM
It doesn't matter that the cost per trade has gone down. The loss to the other shareholders when the reduced valuation must be divided among fewer shares and the gains divided among more shares is the cost that is born by the other members.
It is simplistic to say that they all could invest in the same fashion. If EVERYONE pulled out on a Friday and went back in on a Monday then the resulting chaos would destroy the long-term purpose of TSP investing.
The few are taking advantage of the many in a fashion that is completely unsustainable if everyone followed their example.
If you are smart enough to truly time the market then go play day-trades on your own with all the fees, wins, and losses accruing just to you. Or form a separate investing club with others like-minded. Don't play here while passing the losses to others. If you leave things alone it will grow well over time for everyone. You're literally stealing your additional gain from the other shareholders.
MORE FRTIB MISINFORMATION
DOJ
Thu Mar 13, 2008 11:17 AM
Where do you and the FRTIB get this stuff? You both maintain that I shouldn't have the right to manage my account as I see fit because it causes "buy and hold" TSP participants to lose more money (which by the way is totally untrue). So, I'm not supposed to manage my account with the primary goal of maximizing gains and minimizing losses, but to insure that all participants lose equally when the market drop? If someone chooses to invest in TSP and then "just let it ride", that's fine. But don't try to scare people into accepting this proposal by saying that frequent trading is costing "buy and hold" investors money.
What about the loss TSP participants took when the FRTIB saddled us with $350 million in cost overruns to implement the daily trading system when the original contractor was fired.
Are they going to do the right thing and reimburse us since the daily trading system is being scraped?
No way!
short timers
DoD
Thu Mar 13, 2008 11:24 AM
If you want to trade Day to Day, or Week to Week, thenput your money into an appropriate account. But keep it out of my TSP.
TSP ACCOUNT FOR RETIREMENT.
BOR
Thu Mar 13, 2008 11:28 AM
MMMMM....let me see if you take the $15,000,000.00 that it cost all of us for the 3,000 timing traders and divide it among the 3,000, you calculate that it costs $5,000/timing trader. I believe that this cost should be borne by the inconsiderate timing traders, so take it out of their TSP account and leave the rest of the long term TSP accounts alone so we can also make some money. In other words, the 3000 timing traders should pay for their own folly.
Re: TSP ACCOUNT FOR RETIREMENT.
DoT
Fri Mar 14, 2008 8:08 AM
The I fund is a 26 BILLION dollar fund. That means it cost just 6 CENTS for every one-thousands dollars invested, over the entire year.
Included in that 6 CENTS per thousand invested is the price for the PURCHASES of every single I fund holder, who makes 26 purchases throughout the year (each pay period). And included in that 6 CENTS per thousand invested is the cost of more than 550 THOUSAND L FUND HOLDERS, who have their shares bought and sold for them automatically in EACH DAY's REBALANCING.
At the same time, trading in the S fund actually MADE OVER $$ MILLION PROFIT for you- due to Barcaly's using short-shares.
If you limit Interfund Transfers, you MIGHT shave a penny off that 6 CENTS. MAYBE. TSP BOARD has formally said they don't have a clue what limiting trades will do for costs.
But it will also kill much of that $4 million made from the S fund.
JUST SAY NO TO LIMITS!
Frequent Trades
Army
Thu Mar 13, 2008 11:43 AM
Additional costs should be bourne by those who frequently trade. While the "TSPshareholders" state that the costs have gone down overall then I can only imagine how much more they would have gone down if the frequent traders had left the accounts alone. If they want to take risks with their money I have no objection. Let them trade as frequently as they like. I do object to paying for their trades.
TSP Transfers
Defense Department
Thu Mar 13, 2008 11:51 AM
If you want to be a day trader; pull your money out of the TSP, and day trade somewhere else.
I do not care if the cost is "not that much". The TSP was not designed for day trading. Yes, it is your money. You are free to pull it out and move on, if you do not like the limits.
Re: TSP Transfers
Fed. Govt
Fri Mar 21, 2008 8:55 AM
Good luck. And, by the way, one round trip per month is NOT day trading. This is called money management, and this is why nobody is suggesting to put an end to it.
TSP Day-Trippers
reclamation
Thu Mar 13, 2008 12:12 PM
Pls stop the insanity - my advice to the day traders is "Scott Trade". Also, the last thing we need now is to have the union involved in our retirement!!
Policy change on IFT's
DoD - DSCR
Thu Mar 13, 2008 12:25 PM
I would like to thank the Board on its decision to restrict the few who were causing this problem. That was the right thing to do for the majority. I feel better about increasing my allotment this year. Again thanks. For those who want to play with their money, move to another fund and pay the fees. This is my retirement plan too.
TSP frequent trading
Portsmouth Naval Shipyard
Thu Mar 13, 2008 12:37 PM
If the frequent trading cost is being born by those of us who don't do such, then there needs to be a limit (as proposed) on the number of trades per month, or a fee to cover the cost of such trading. This is no different than a broker would do for trading stocks, or a mutual fund company such as Vanguard restricting the number of days between trades. Market timers only do this because it is "free" to them (i.e., no set fee), and could care less about the costs to the rest of the participants (if established). It is only sensible to suggest that large movements of any "share" will affect the price of the remaining shares, but I 'm not certain as to how much, if any.
TSP
DoD
Thu Mar 13, 2008 1:55 PM
TSP called me an abuser for shifting my TSP around so as to cause loss of revenue to other non shifting participants. Is this capitalism or what. After all, I give 10% of my salary to TSP but ony 5% is is matched. What is going on with the other money that we don't get matching for. Who is getting the interest on my other half. I guess I get some of it back but not all. The administrators of the program makes the big money but not us. I made more money last year by changing my stocks than TSP made for me in the last 17 yrs. We are talking about my money not theirs. They are abusers not us. I suppose that they feel they have the right to criticise us rather than their conduct. Thanks.
Re: TSP
DOD
Thu Mar 13, 2008 2:37 PM
Instead of putting your $ in TSP why not send them to a private account at any number of places. I have some of my money doing that as well as TSP.
2/mo is enough to keep up with current issues. In a pinch you have unlimited movement to G that would help protect your investment if the market tanks after you used your 2. What you couldn't do, is quickly put it back if the market moves up the next day...gotta wait. So, your decisions will (hopefully,) be more rational for the long term.
Cost per shareholder
Air Force
Thu Mar 13, 2008 1:58 PM
They are right! The cost PER shareholder is low. As is the cost of welfare PER taxpayer, the cost of our national debt PER taxpayer (and future taxpayers), the cost of social security PER taxpayer, etc., etc.
It is the unfare burden of a few on the many that is the problem. Oh, yeah... I see that it is a "Federal Union Representative" making these "true lies." Well, he's right. But, he's more wrong.
You have to give them credit for trying, though. Just don't give them anything else.
TSP - LOSS OF TRADING ISSUES
DEPARTMENT OF DEFENSE
Thu Mar 13, 2008 2:24 PM
i agree with the union. they are basing their comments on statistics.
it must be healthy for us to trade as we see fit based on the cost to each member going down last year.
We Need An Employee Voice on the Board
Leg. Branch Agency
Thu Mar 13, 2008 3:04 PM
The TSP Board wants to have it both ways. So called "frequent traders" are either dopes who are "day trading" by trying to time the market, but losing at every turn, or they're tricksters who stay ahead of the curve with a strategy that makes a sizable profit from the international market reports.
Of course, you cannot day trade in the TSP accounts and even the most "frequent trader" can only effect trades about 22 times per month.
When this policy takes effect and the majority of participants are in the G Fund because they cannot control their money, the Board will bring back the complaints of old that participants are not taking on enough risk.
TSP Frequent Trading
VA
Thu Mar 13, 2008 3:22 PM
Actually, it's a moot point to me whether the costs are declining as TSPSHAREHOLDER.ORG says or not. Either way, the costs are still higher than they would otherwise be if these market-timers didn't make excessive trades.
If these market-timers are making the killing they think they are with frequent trading, why are they worried about paying a few extra bucks for the privilege? I say let them play games on their dime.
Of course, the funny part is that Warren Buffet - who just passed Bill Gates for the richest man in America title, says he doesn't know enough to time the market but somehow these wannabe's do. How's that line go , something like 'stupid is as stupid does'?
Re: TSP Frequent Trading
DoT
Fri Mar 14, 2008 11:13 AM
"If these market-timers are making the killing they think they are with frequent trading, why are they worried about paying a few extra bucks for the privilege? I say let them play games on their dime."
I could not agree more about paying a few extra bucks. If they charged $10 per trade, it would generate $24 million per year, to cover those costs of $13 million per year. Those who never move would not pay a thing.
But TSP Board is not proposing fees. They are proposing only limits. And they are not allowing anyone to take money OUT of the TSP and move it to a private fund, if you are still employed.
THAT is wrong.
limiting TSP transfers
USDA Forest Service
Thu Mar 13, 2008 3:36 PM
I've not seen numbers that convince me that limiting transfers is necessary. The Board is not giving us the full picture, like how buy-and holders can benefit from the time differences involved in frequent I Fund transfers.
What I'm hearing from the Board is sounding very much like the response of a parent whose child is not behaving as expected. Did the Board not fully consider the results of giving us unlimited transfers in 2006?
Market volatility increased during 2006 and 2007. Those of us who actively manage our accounts make more transfers during such periods. Also, those of us who are within 10 years of retirement can benefit from managing our accounts more actively. But there has been no acknowledgement of any of this from the Board.
By the way, I'd like to know what it will it cost to change the system to restrict transfers.
TSP, IFT's
Dept of Navy, USMC, Camp Pendleton, CA
Thu Mar 13, 2008 6:36 PM
If the "many" participants in the TSP are to stupid to get out during a crash, why should I be forced to stay and go down with the ship. I'll bet the captain of the ship got into a life boat long before the rest of us seen the crash coming.
If I make a mistake and get in or out at the worng time, I have nobody to blame but myself.
Please continue to allow frequent trading.
Thank you.
Wake Up!
Treasury
Thu Mar 13, 2008 8:44 PM
The S&P 500 closed at 1469 at the end of 1999. Today it closed at 1309. That's a loss of 11% in the last eight years. If you aren't moving your money around, your account is floundering.
You folks in FERS better do something or you'll be working until your are 75. Unless you are counting on Social Security. Then maybe 70. ;)
Paying a small fee is a small price to pay because your account balance is too important. Don't let them stop you from managing your money. Vote for a fee rather than limits.
Good luck!
Cost of Interfund Transfers
USAF
Thu Mar 13, 2008 9:24 PM
I have read over and over in these comments that the Frequent Traders are causing the others to lose money in their accounts. Does anyone know how much money this is? Quote TSPSHAREHOLDER.ORG
"While the number of TSP Participants increased from 3.68 million to 3.9 million, the actual cost of trading per TSP shareholder declined in the year ending December 31, 2007.
Total interfund transfer (IFT) trading costs were $ 4.15 per TSP shareholder in 2006.
In 2007, they dropped to just $3.55 per person."
People this is for a year, and includes everyones IFTs and the costs of rebalancing the LFunds daily not just the Frequent Traders. Do you want to give up your right to freely handle your retirement funds for $3.55 a year?
Re: Cost of Interfund Transfers
DOD
Fri Mar 14, 2008 10:41 AM
The greater fraction of losses divided among those who stayed and the lesser fraction of gain as those who left return adds up.
If everyone did mass bailouts and mass buyins the whole system would collapse. Since it isn't something that works if everyone does it, it is a matter of a few taking advantage of the many.
The attempts to justify it sound to me like a con artist trying to justify that it is really the "mark's" fault that he was taken. Well, the "mark's" are on to the scheme and will stop it.
inaccuracies
DOI
Thu Mar 13, 2008 10:12 PM
Mr. Smith,
First, the FRTIB has not proposed any fees with IFT limits. Fees were discussed as an alternative at the meetings, but neither the interim rule which proposes limiting METHOD of transfers (not number), nor the proposed rule (limiting number of transfers) mentions imposing fees. The FRTIB most emphatically stated that they decided against imposing fees for precisely the reasons you cite FOR it.
Second, your headline of 2/28 "TSP Interfund Transfers Soar in January" is inaccurate. FRTIB even thanked shareholders for reducing their January transfers, as reported in articles and interviews by FRTIB's Tom Trabucco. I suggest that if you are going to promote FRTIB's propaganda, you at least get your facts straight.
Re: inaccuracies
FedSmith.com
Fri Mar 14, 2008 6:50 AM
With regard to the other article you referenced on the January TSP returns, the monthly investment report from the TSP stated "Net interfund transfer activity soared in January. Participants liquidated $1.8 billion from the C Fund, $1.2 billion from the S Fund, $2.3 billion from the I Fund and $399 million from the L Funds. The money went to the G Fund ($4.4 billion) and the F Fund ($1.3 billion)." That is from page 7 of the monthly report issued by the TSP--it was not my personal opinion. As far as I can determine, these facts are "straight" (and also accurate) according to the TSP staff members who compiled the report. The underlying figures in the report appear to support this conclusion by the TSP's Chief Investment Officer.
Re: inaccuracies
DOI
Fri Mar 14, 2008 12:36 PM
I must disagree with you. Your article specifically (and inaccurately) states that FRTIB has dediced to impose FEES as well as limits.
Quote:
"The TSP has decided not to allow the frequent trades and to impose an additional fee on those who are frequently trading "because it is impossible to correctly assign the exact costs to those who are making interfund transfers." The board also defends its proposal noting that the proposal to limit trades is "more accommodating than necessary for optimal rebalancing frequency and demonstrably more liberal than the policies of 40 record keepers which use the same processing system as the TSP."
However, I do apologize regarding your February 28 article as I was in error. IFT's decreased in February, not January. Mr. Trabucco's statements are on the web.
http://wtop2.com/emedia/109948.mp3
limits
DOI
Thu Mar 13, 2008 10:26 PM
The majority of us actively managing our fund are boomers within 5-10 years of retirement. We are trying to maximize our returns in these last few years because we realized that the buy & hold strategy FRTIB promoted would leave us short of funds in retirement. An audit conducted a few years ago revealed this and the fact that shareholders were not rebalancing their accounts often enough to fund their retirement, so FRTIB decided to allow unlimited transfers. They awarded a contract to modify the system for this purpose, which resulted in no deliverables, a lawsuit, and a $35M settlement, all paid for by TSP shareholders on top of the contract cost. FRTIB then hired another contractor to finish the job at additional cost to shareholders. The majority of shareholders still did not rebalance their accounts, so FRTIB created and promoted the L Funds. This is great for younger feds in it for "the long haul" but is of no help whatsoever for boomers. Limits are a step back.
fees
DOI
Thu Mar 13, 2008 10:33 PM
Those of us actively managing our accounts have no problem with paying a transaction fee for IFT's. If FRTIB thinks 3 IFT's per month is reasonable and costs are the issue, then we are willing to pay for the privilege of IFT's in excess of 3 per month. We suggested this to the Board. 3 transfers per month =36 per year. We also suggested that the limit be an annual (36) rather than monthly limit, this would give us the freedom to manage our accounts in a volatile market. Some months we buy and hold, others we need to make more IFT's. And yes, I outperformed the funds, my annual statement proves it. No, I'm not willing to share it with FEDSMITH because he can't accurately report FRTIB's data. I'm certainly not going to trust him with mine.
TSP frequent interfund transfers
IMCOM-K
Fri Mar 14, 2008 1:58 AM
Event though there has been this fundamental movement to restrict the transfers, TSP has not given participants a wider array of products including reverse EFT's which increase in value during bear markets (come feel this bear market will continue until 2009 through 2012 with some anticipation of a market rise the later half of 2008 due to momentary effect of FED monetary policy). Nevertheless, the cause of market timing or interfund movements is that particpants are trying to maximize thier 401K due to stangnet TSP returns or sideways movements in the market. During an accelerated bull market, partricipants will most likely reduce this behavior and thus less issues with TSP managment on market timing. Arriving from private industry and comparing our historical returns with my former employer, our TSP returns are not nearly as aggressive. I am curious if TSP managment rebalances the type of companies and sectors they are invested in from time to time?
I Fund trading
USDA
Fri Mar 14, 2008 7:36 AM
Why should TSP acct. holders subsidize the trading costs of the I - fund daytraders?
Re: I Fund trading
Navy
Mon Mar 17, 2008 5:46 PM
TSP trades
BLM
Fri Mar 14, 2008 7:38 AM
Suppose that you are invested in stocks at the beginning of the month and stocks begin to decline. You make a couple of moves to the G fund to save some of your investment. Later that month the stocks begin a rebound and begin a climb. But because you made two moves, into the G fund, you are stuck in the G fund. Your first two moves for the month were to the G and they count as your two moves for the month. The board is not being totally truthful about unlimited G fund transfers, it's not as unlimited as they would like us to believe.
Re: TSP trades
DoD Navy
Fri Mar 14, 2008 9:02 AM
That is the trap of market timing.
TSP proposed IFT restrictions
USDA
Fri Mar 14, 2008 1:17 PM
All TSP participants should be outraged by this proposal to restrict your ability to manage your retirement funds as you see fit. Retaining the right to make unlimited IFTs does NOT cause the costs to go up for everyone else - TSP is using selective numbers to make their bogus argument. Don't assume what they are saying is correct, folks - do your own research as I have, and you'll see that it costs only about $3/year/TSP participant to maintain your current rights to manage your money as you see fit (and the costs are going DOWN each year, not up). Why would anyone voluntarily give up this right for 3 bucks per year? Wake up folks, and fight this ill-advised proposal!!!
Re: TSP proposed IFT restrictions
Navy
Mon Mar 17, 2008 5:44 PM
That is it in a nutshell. The TSP management does not have the data to demonstrate that "frequent traders" are costing significantly more and they are manipulating those who are not paying attention. They are selectively using numbers to enrage the passive TSP account holder - of which the simple minded will fall for.
Re: TSP proposed IFT restrictions
Fed. Govt
Fri Mar 21, 2008 9:16 AM
When TSP rules are reformed, they should only be reformed so as to provide greater opportunity for participants to maximize returns from their savings - just the opposite of what is being proposed. Ultimately, lazy whiners would learn that their childish whining isn't doing them or anyone else any good.
I Fund IFT Costs
USDA
Fri Mar 14, 2008 10:52 PM
The costs cited by TSP are one-thritieth of the costs of comparable mutual funds, and the costs cited are soley because the Thrift Board sets the price at 4.p.m., rather than waiting until the following morning at 7 a.m. If they did that, roughly 80% of the costs of interfund transfers for the "I" would completely disappear.
Exposing Long-Term TSP Investors to Risks
DoC
Sat Mar 15, 2008 10:32 AM
I do not have the advanced expertise of the "day traders" that are complaining and certainly none of the expertise of the Board. I don't know who is correct in this tug of war, or which facts are correct on either side. What I do know is (1) the TSP was designed for a single purpose - a basic simple low cost method for supplementing the Federal retirement plan with a growth component keyed to the economic growth of the market, and (2) the fundamental assumptions upon which this design is based is to spread the risk/reward across all participants by tracking indexes, rather than buying/selling individual stocks, bonds, and mutual funds. The use of the TSP for frequent trades is well outside the bounds of the original design and, therefore, should be avoided. Analogy: A butter knife can be used as a screwdriver in a pinch, but it ruins both the knife and the screw. Daytrade somewhere else! Use the TSP for what its design can accommodate, nothing more. If you need a screwdriver, buy one!
TSP Managment
IMKOM-K
Sun Mar 16, 2008 5:12 AM
Before folks start throwing stones at a few number of market timers, people shoud also start questioning TSP managment to determine if they have been effective in their overall managment of our retirement. It's always convenient to use scape goats when performance measures aren't meant by inaction or wrong action by managment. If you look at thier investments for each fund, the investments practically stay the same. Most people who understand the markets realize that different market sectors will perform stronger or weaker depending on the economic cycle. This could maximize the returns that TSP participants get. Again, people must look at the timing of this annoucment by TSP managment and understand that there is always the story that people aren't being told. I don't think the cost is as high as they state and it is being overally exaggerated to take the heat off thier poor overall managment of our monies. Lets not give up our freedom to manage our own affairs.
Re: TSP Managment
dod
Mon Mar 17, 2008 12:15 PM
Market Timing vs Buy and Hold
USPS
Sun Mar 16, 2008 11:26 AM
For those of you for the restrictions,i challenge you to try Market Timing.Move just 1% into and out of the F,C,S or I Fund, then back to the G Fund.I will guarantee you will do better in a bear market vs. waiting every 7-8 days for the G fund to pay off.Those who stay for the long haul in the C,S,I or L Funds in a bear market are getting killed.I'm up 2% ytd while most of you are down 9-11% ytd.Why would you watch your money being flushed down the toilet?Don't knock it until you try it.That is your retirement money for you to maximize your returns.Give it a try.2007 annual statement up 20%.
Reply to IT Spec
IMCOM-K
Tue Mar 18, 2008 3:11 AM
Go look at the sector breakdown of each fund and how they are invested. For instance the S fund is heavy in financials, why on earth would you be weighted heavily on the financials at this moment or actually back last summer when the first signs of a financial breakdown was occuring. Another example, take a look at the I fund. They are heavily invested in Japan. Japans stock market (Nikkei) has been performing poorly. It's market has lost 26 percent since last summer. A part of managing funds is to reallocate (move money) into better performing sectors on a gradual basis to mitigate risks more appropriately.
Re: Reply to IT Spec
dod
Tue Mar 18, 2008 11:39 AM
You're asking them to act like actively managed funds.
IT SPEC
IMCOM-K
Tue Mar 18, 2008 10:01 PM
Lets say that you are in a particular index. If your index was sinking would you stay in the same companies/sectors or reallocate resources. Yes the funds are based/modeled after indexes but someone has to select what sector and specific companies those indexes are based upon. Which in turn is made up of stocks. Indexes=Stocks!
Also, do you want to spend your managment fees on folks that are attentive to your money or just collecting thier fat paychecks and complaining about market timing. Might as well take your money and invest in EFT's (there is no fees other than a one time buy fee)
Re: IT SPEC
dod
Wed Mar 19, 2008 8:32 AM
This is why expenses are so low for indexed funds, the overhead is extremely low. If you want active fund management you'll have to pay for it in higher fees. If you do that you cease to have an indexed fund, you will have an actively managed fund.
Grow Up!
Fed. Govt
Thu Mar 20, 2008 8:43 AM
I'm not familiar with the organization mentioned in the article. I am not a "Frequent" trader, but I do believe that one round trip per month should be considered normal for anyone with investments in paper assets. It is utterly foolish to not participate in these investments. Paper is paper, it has zero value; unlike real estate. Just ask the shareholders of Bear Stearns. Only a FOOL would sit idly by when he has money invested in paper assets.
Our money is supposed to track indexes. The C Fund is doing a pretty good job. Full swing from 2/26 to 3/18 shows -7.74%, +4.58% with -3.52% overall; while the SP500 was -7.81%, +4.51% with -3.52% overall. That is satisfactory. The S Fund was -9.42%, +3.57% with -6.19% overall; while the RUT was -10.23%, +5.89% with -4.93% overall. The S Fund performance is unacceptable! The fund lost 1.26% in value relative to the RUT over 1 swing which was less than 1 month in duration.
TSP needs to focus on doing their job. Whiners need to shut up.
Transaction Request Deadline
Fed. Govt
Thu Mar 20, 2008 8:50 AM
If the TSP was at all concerned with its customers it would allow transfer requests up until at least 1530 hours EST. Forcing requests to be in prior to 1200 hours EST is barbaric, insensitive, and forces the participant to act on partial information.
TSP should conform to the industry standard. Current deadline rule is unacceptable.
TSP Frequent Trading
USAF
Thu Mar 20, 2008 10:52 AM
1. Why are people trading when they are probably using Government assets (time & network) while on duty?
2. If you wish to 'play' the market ... set up your own trading account seperate from TSP.
3. Or ask TSP for a trading account and pay tthe trading fees.
4. I suspect many frequent traders are to 'cheap' to set up their own trading accuonts (trading fees), and use the 'Free' trading service provided by TSP. People wanting to squeeze that last penny in higher returns are wrongly working for the Government ... they belong on Wall Street or at a Cassino table.
Re: TSP Frequent Trading
Fed. Govt
Fri Mar 21, 2008 8:44 AM
ENJOYING ROCKY MOUNTAIN NAT'L PARK
Fed. Govt
Fri Mar 21, 2008 9:45 AM
Hi, Mr. Smith
I'm really enjoying Rocky Mountain National Park with my family during Spring Break. Coming here is a freedom. I didn't have to come here, but I chose to come here. It is a freedom. It cost me $20 for a pass which is good for 7 days. Those who wanted to save $20 could choose to stay at home - that is their freedom.
What if I want to come back in 2 weeks? Can I come, or must I wait until next month? The park entrance fee is another $20 if I'm allowed; and, of course, I am.
I guess I could sit at home and WHINE about someone else coming to Rocky Mountain Nat'l Park while I sat at home watching TV. What good would that do me or anyone else?
Tell the TSP to just charge the $20 fee for IFTs, move the deadline from 1200 hours to 1530 hours EST, and lets get on with life.... Let those who want to watch TV watch TV - it's their freedom. Giving whiners an audience doesn't do anyone any good.
Money Management 101
DOD
Fri Mar 21, 2008 9:55 AM
Based upon what I'm reading in the various comments, it appears that there's a difference in knowledge level between those that manage their accounts daily and those that do so with much less frequency.
While I don't "day-trade," I do shift btwn funds based upon the dynamics of the market.
Instead of limiting the number of trades, why not consider providing additional resources to help educate less knowledgeable investors? Ultimately, that would benefit EVERYONE invested in TSP.
Someone with time and market accumen might consider developing an online resource to help assist less knowledgeable TSP investors in managing their money.
If, at the end of the day, the "day-traders" are assessed a nominal fee, so beit. Not much different (and probably a lot less) than buying/selling on Etrade or other online brokerage.
Daytrade
IMKOM-K
Sat Mar 22, 2008 7:47 AM
I keep hearing the word daytrade in the comments. A daytrade is based on one doing one full round trip on the same day. For instance, move to xyz fund from abc fund then back to abc. That is totally impossible in the TSP. As a matter of fact if you put your transfer before 12:00 noon it will not take affect until the following day. Folks..people are not daytrading. I don't know who started this but this is really starting to get out of hand.
Re: Daytrade
Federal Govt
Fri Mar 28, 2008 6:52 AM
Neither do I, but here is an example from the article noted below:
"The money in your TSP is your serious money. It's not play money. It's definitely not appropriate for the fool's errand called day-trading. What you build in your TSP will have a direct effect on how financially secure your retirement will be."
Taking Control of Your TSP Account (Part 2)
By Rob O'Blennis
Wednesday, December 5, 2007
The article proved that hindsight is 20-20, but foresight is not. I totally agree with his next statement:
"What I want you to understand from this article is this: your money absolutely must continue to grow over the next several decades if you have any hope of not running out of money in retirement."
Losing 14% of my savings PRIOR to making further gains - which is what these 2 fund did after the article was published - is not my idea of “Taking Control”.
Frequent Trader Limits to TSP
NSA
Mon Mar 24, 2008 8:40 PM
I'm one of those 3,700+ Frequent Traders. Before I started moving "MY" funds around I was one of the 99% of TSP shareholders who earned paltry returns letting it sit idle. 2007 I nearly doubled the I fund rates by frequent trading. Now I am operating in the 2 or 3 trades p/month limitations and still doing better than the 99% lemmings. I retire very soon so I have already layed the ground work to transition my entire TSP balance into an online account where I can trade as often as I want and up to the last minute of the trading day (unlike TSP which makes you trade by 12noon EST). If I were a younger worker staying with the gov't then I would reduce my max allowable $15,500 contrib's to the NSA matching of only 5% and divert the rest of my retirement contributions to an on-line investment firm that I can manage. Oh...by the way, did I mention that I am retiring 14 years before most of my co-workers because I frequently traded in the TSP and it paid off! TSP board did me a favor!
Re: Frequent Trader Limits to TSP
Federal Govt
Mon Mar 24, 2008 10:38 PM
Re: Frequent Trader Limits to TSP
US Air Force
Tue Mar 25, 2008 8:55 AM
Re: Frequent Trader Limits to TSP
U.S Air Force
Thu Apr 3, 2008 8:54 AM
The U.S is a land of opportunity. We have an opportunity to manage our money based on our own knowledge, why let the TSP Board takes it away? Recently, one of my friends whom I play tennis with, told me that his TSP account has been down significantly since he put (not invest) all his money in the C fund. I asked him why he did not make any trade to protect his account balance? He said, I am lazy and do not know anything about the market.
This is a true story and I honestly do not wish to insult any buy and hold people.
TSP Short Term Pre-Retirees
Bureau of Prisons
Tue Mar 25, 2008 2:51 AM
"Don't mess with my retirement ! Don't make me work
longer because of these restrictions ! If your a Long
Term Investors, hit the L-Funds, thats what their for. I'm
a short term (close to mandatory) investor and this is
nothing less then Fraud and Descrimination rolled up
into one big ball of horse hockey. Ask them about the
computer mess-up that cost millions for nothing. IFT's
have been unlimited since I started participating. Now,
while I'm so close to retirement, they want to restrict
me over $3.55 per year. I want to avoid loses and take
a risk for maximum gain. Leave me alone, your more in
my life then any american should have to put up with.
TSP Frequent Trading
GSA
Tue Mar 25, 2008 11:08 AM
What's amazing is that so many federal workers have the time to read and comment on this issue over and over and over. Assuming they are at work while they are researching and studying the market so they will know how to trade their funds, who's doing the work they are paid to do?
Re: TSP Frequent Trading
dhs
Wed Mar 26, 2008 7:13 PM
The same folks who are doing your work while you're here posting your comments.
Re: TSP Frequent Trading
Federal Govt
Thu Mar 27, 2008 5:20 AM
Someone once said, "Cast out the beam from your own eye before you worry about the mote in our eyes."
Lets work together to change the IFT deadline from 1200 hrs EST to 1530 hrs EST. That is the solution for waste, if there truly is any. Demoralizing approaches are counterproductive, as you can see from this whole fiasco created by restricting participants' IFT freedoms.
Does transferring large amounts of money, impact t
DON
Thu Mar 27, 2008 7:57 AM
Please help if you can. I have been seeking the answer to this question from official source and have not gotten a good answer. Can the funds value be manipulated by moving large amounts of money into and out of the funds? Or are the funds only tied to their indexes. I am sure it is obvious why I ask this question.
Re: Does transferring large amounts of money, impact t
Federal Govt
Thu Mar 27, 2008 12:04 PM
Go to the TSP web site and read the "Fund Facts" for each fund. The info you are seeking is there.
It is found in the "RETURNS, SHARE PRICES, & FUND SHEETS" folder located on the center right of the TSP home page.
Note that the managers say that they only invest 2 ways:
a) Most money is, by law, invested in a particular fund that is designed to track a particular index (e.g. The S Fund is designed to track the DJ Wilshire 4500 Completion index, which has a ticker symbol of DWCP. Note that these stocks are the actively traded "Non-SPX" stocks in the US. As an investment vehicle, the managers say that S FUND investments are invested in the Barclays Extended Market Index Fund (which apparently does not invest in those companies in the index that has a market cap less than $1B US.
Re: Does transferring large amounts of money, impact t
Federal Govt
Thu Mar 27, 2008 12:11 PM
B. A "Portion" is retained to take care of daily client activity. This money is invested in the SP400 and RUT futures market.
Futures are highly leveraged and if the trader bets wrong, they lose a lot of TSP money. Vice-versa if they bet correctly. Doesn't say who the traders are or who/where these services are acquired. I wonder why this "portion" needs to be invested at all. I would think that placing these highly risky bets with TSP money (instead of investing) would be a higher concern for the average TSP participant than whether or not their co-worker is fairing better with their own nest egg via IFTs then he/she is by being more passive with their resources. Just a thought!
Re: Does transferring large amounts of money, impact t
Federal Govt
Thu Mar 27, 2008 10:39 PM
I'm not sure I answered the question, and I certainly am not an official source. My opinion is that money is flowing in and out each and every day. Some days more flows out than flows in and other days more flows in than flows out. Any one investor, or even group of investors, are normally just a drop in the bucket.
Since the investments are made into funds which track the selected index, the value of the fund will rise with capital gains (stock prices going up) and with dividends received, and will fall with capital losses (stock prices go down) and with fund management fees deducted. The value of the fund is viewed on a "per share" basis, not the aggregate value of the fund; so the quick answer to your question is "no". The value of the fund is really not relevant to individual participants, rather the "per share" value. Hope this helps.
Restrict market trades
VA
Tue Apr 1, 2008 12:24 PM
YES, the market trades should be restricted...I'm the one who let my money ride, thinking the TSP would turn around. I haven't been hurt very much, around 4,000.00. If I'm doing the wrong thing, I sure would like to know about it! I'm getting more worried every day, but it will take alot to get me to transfer my money because when it does turn around, it will cost me more!
Against day trading
DVA
Tue Apr 1, 2008 12:39 PM
THe comments by Jim Pratt, founder of TSPSHAREHOLDER.ORG, fails to consider two important points
So the cost per shareholder is down from 2006. Big deal, I made 6 changes so the cost was $25.00, the guy who market times makes 240 changes a year , cost $1040.00. I pay for his exchanges!
Then there are the other costs to shareholders. As mentioned above "when this small cohort rapidly removes funds in anticipation of short-term market losses, any losses which in fact materialize are spread over fewer remaining participants and are therefore more severe for those who maintain the long-term approach. Those who rapidly shift out secure the higher value based on the closing price for the day, while the remaining investors bear the losses when the shares are sold at he lower opening price on the following business day.
If you want to market time, do it on your own dime. I'm glad the board is watching out for the majority and not the minority.
Re: Against day trading
Federal Govt
Thu Apr 3, 2008 6:25 AM
THERE IS NO DAY TRADING GOING ON IN TSP.
THERE IS NO DAY TRADING GOING ON IN TSP.
Did you hear that? If not, maybe you need an audiogram.
Looking out for the rights of what seems to be "the few" is not looking out for the rights of "the minority"! It is looking out for the rights of EVERYONE who participates in TSP.
Global war on terror.... excellent example. Looking out for the minority is actually looking out for everyone.
Authors of these articles are only fomenting jealousy. They should be educating TSP participants, not instigating them.
240 IFTs a year? Come on, there is a limit now of 1 round trip per month. The TSP trade I exited yesterday on the close netted 4.9% in the brief period I had it in. Get smart instead of angry and bitter at others.
Fuzzy economics
IRS
Tue Apr 1, 2008 8:38 PM
All this talk of cost is specious, from the plan that has the lowest costs? SO they want it both ways? Plus, Market, please take an Econ course. A few day traders can't change the market, if so George Soros could do it single handed. I'm just wondering why you are so envious of traders? Portfolio Envy?
I'm against any restrictions. If the costs can be proven, they by golly pass them on.
TSP Board and Managers
EPA
Tue Apr 1, 2008 9:14 PM
The TSP Board and managers are showing that they do not have a full grasp of what normal index funds should be expected to do. How is it that outside of the TSP, buying and selling takes place al day long, such as with ETFs, or at the end of each trading day, as mutual funds do; but the TSP has difficulty with a relatively few people who actively move their funds around. This is incompetence. The TSP should be turned over to a firm or firms who have the ability to handle large numbers of accounts. Clearly, there are many firms that have this capacity and do this each and every day of the work week. TSP flunks.
Re: TSP Board and Managers
IRS
Tue Apr 1, 2008 9:59 PM
Re: TSP Board and Managers
DoD
Wed Apr 2, 2008 7:41 AM
You're wrong.
Most mutual funds (whether index or actively managed) have restrictions on frequent trading for the same reason that's behind the TSP restriction effort. EFTs are a completely different breed, they're not a valid yardstick to measure conventional mutual funds against.
Day Traders
DoD
Wed Apr 2, 2008 10:12 AM
If folks feel the need to "play" the market, they should do so outside the TSP. Go- set up accounts with firms that permit and encourage this type of activity and have at it especially if you think you can do better in the long term. Key here is long term, not day trading....
TSP Board 's trade limitation
U.S Air Force
Thu Apr 3, 2008 7:59 AM
The trade limitation proposed by the TSP Board does more harm than help, especially in the current extreme volatile market. For example, my friends, listened to the general investment advise from many "experts", they have used "buy and hold" (made no trade) plan for their TSP investment for the last 3 months. They lost more than 10% of their money.
I believe the TSP Board must reconsider about their propsal. They should allow more trades and be flexible about it, ie. allow the number of trades per year not per month. Since there will be months that people do not make any trade but other months they NEED to make more trades depends on the market situation.
The TSP Board should not think they are smarter than people because there are so many TSP intelligent investors out there. Their wisdom are not less than the board's.
Re: TSP Board 's trade limitation
DoD Navy
Thu Apr 3, 2008 9:13 AM
Trading based on the market situation doesn't work.
That's market timing and it's been proven time and time again that it isn't effective.
Re: TSP Board 's trade limitation
State
Wed Apr 9, 2008 9:09 AM
The above suggestion to the TSP Board on being more flexible with the 2 moves per month limit is a good one. How about something like "2 moves per month, or 18 moves per year done anytime"? That should satisfy those wanting to move funds based on their own models (some of which seem to work well).
Re: TSP Board 's trade limitation
IMKOM-K
Mon Apr 7, 2008 5:05 PM
I whole heartly disagree with you. I made 28 percent return on my TSP account last year by properly rotating through the funds and avoiding the downturn loss.
There were market signs of a housing bubble last summer. People just need to wake up and read the news. If were you were more involved and educated about your financial future you would not have made that statement.
There are lots of resources out there to become self-educated and not be passive about your finiances.
Use your head
United States Postal Service
Tue Apr 8, 2008 11:17 PM
Funds are meant to be managed!.. You can sit there and lose your thousands of contributed dollars or you can birth some additional brain cells and take an active part in your retirement, within the system. But please-don't critique people that are willing to use initiative and common sense to better their lives. Your long-run type of mentality is just an excuse for laziness and lack of foresight! I have no problem with a twice a month limit on transfers. As for those of you brain-dead folks out there who insist on losing your funds because you are too lame to take advantage of what is offered you, well-I guess you deserve what you get.
Re: Use your head
DoD
Fri Apr 11, 2008 12:50 PM
The fact remains that over the long term (and retirement investing is a long term concept), both buy and hold and market timing portfolios provide similar results when properly managed. Most of the anecdotal evidence cited by folks on this blog is short term (1 or 2 years). It makes no sense to judge a long term proposition by short term results.
Re: Use your head
Federal Govt
Fri Apr 11, 2008 9:08 PM
Maybe some people are angry at having their rights stripped from them, and are saying some unkind things. It all reminds me of the nursery rhyme, "Sticks and stones may break my bones, but words will never hurt me." Well, it's the TSP board that is throwing sticks and stones, and by stealing our right to freely manage our accounts, they are breaking our financial management bones. The unkind words said in response will pass, and prove harmless. That cannot be said about what the TSP board is doing.
Re: Use your head
DoD
Sat Apr 12, 2008 10:56 AM
The concept also recognizes that it's impossible to know ahead of time what the market is going to do in the short term. Many intelligent professionals have tried to predict this sort of thing, yet even they don't always agree. If the intelligent professionals can't always agree (and therefore are wrong sometimes), it's obvious that the everyday citizen stands even less of a chance of getting it right all the time.
Re: Use your head
Federal Govt
Sat Apr 12, 2008 7:14 PM
There are temporary swings in all market cycles (bull, bear, and range-bound).
Why must IFTs be requested by noon EST?
Why are there no ETFs to rotate into?
(energy, metals, agricultural, etc.)
Suze Orman was asked today about investing in TSP and her advice...."Get out and find a good place to put your money."
The TSP is a cheap, inferior retirement plan with lame management and harsh rules. And it's getting worse!
Re: Use your head
DoD
Tue Apr 15, 2008 9:58 PM
Market timing and buy and hold are both legitimate approaches and can both provide well if properly managed. Likewise, both can lead to disappointment if not properly managed.
TSP Management
DOT
Thu Apr 24, 2008 9:25 AM
I feel it is very dishonest for the Government to encourage us to save our hard earn money, but make very difficult manage it. 1. They are using our saving to do whatever they want. Then charge us interest on the money if we need to borrow from the saving in hard times. 2. I feel that we need to take a vote on the number of times a person may change their account each month, 2 is not enough. 3. There has to be a better way to handle TSP then the way it is held now.
Wake up and smell the money (burning)!
DoN
Thu Apr 24, 2008 10:12 AM
All this talk about day trading and costs & all the comments. What about all the "official work time" that these 3,000 or more employees are wasting every day. Aren't they employeed to do a job ???? You can't tell me that these folks do all the trading on their own time!!!! Supervisors/Managers should wake up and consult their HR ER/LR Specialist on how to stop their employees from wasting the government's time and make them do the job they were hired for.
THEY ARE TALKING OUT BOTH SIDES OF THEIR MOUTH !!!
NRCS
Thu Apr 24, 2008 11:22 AM
they say that a small minority 1% is causing the majority 99% to bear the blunt of the market change. granted i did not go to a major university for math. but it does not take a mathmetician to see the disparity in these numbers. the board has never given us guidance on how to invest in our future, and now they want to help us !!! well thanks !!!!! i'm csrs, but i really feel sorry for the fers folks. they have been left to make their own retirement nest egg.good luck folks !!! ask the board for some guidance and see what you get !!!!
Limiting TSP Transfers
Bureau of Reclamation
Mon Apr 28, 2008 8:13 AM
Up to 2 trades a month is enough for me, I'm looking for more instant results. Used to take days for request to happen, now much faster. An other cost is to the tax payers. Hear of some that come in to the office and first thing look at overseas market results, US market early morning response, then make TSP changes? Who is covering this time?