It really stings with this new 2 trades per months policy for TSP. My hands are tied!! I was never one of the day traders, who brought this over bearing restriction. We need more than two per month & we need more fund choices, to do this job right.
Re: Portfolio Paralysis
Analyst State Dept in Washington DC Fri Oct 10, 2008 11:54 AM
My feeling exactly. Thanks TSP managers and Day Traders.
Re: Portfolio Paralysis
Beach Bum DoD Fri Oct 10, 2008 6:11 PM
Ummmm...
1. Before we start this noise about "Day Traders" lets be clear about one thing - you place a trade and it can take up to 48 hours to process, 48 hours - not instantly. This amounts to 2 trades a week. This is not day trading.
2. The handling of accounts is contracted out. What was never spelled out was what the costs were for handling a transaction. However, the "L" funds are rebalanced daily - what is the cost there?
3. Oh yes, and my biggest pet peeve - why is 21 percent of the C fund invested in financials? Or it was when I checked the leaflet about TSP. What were these people thinking?
Re: Portfolio Paralysis
Fed Peasant DOD Sun Oct 12, 2008 7:54 PM
Beach Bum DoD:
That's part of the index. Do your homework.
Re: Portfolio Paralysis
worker government Tue Nov 25, 2008 11:22 AM
You sound like a speculator. Stop trying to time the market. The purpose of these funds is to leave the mponey alone, not to speculate. 2 trades per month is enough. I do not want to pay for your speculation.
I would have lost more, but that was all the mone
Health Insurance Specialist Centers for Medicare & Medicaid Services Fri Oct 10, 2008 11:53 AM
Regarding this article, how can the TSP expect members to risk losing all of their funds in anticipation of the market rebounding? Are we supposed to sit and watch every dollar disappear? I guess it is fine if one has lots of funds to risk, but when you don't, it is difficult to watch every dollar disappear and know that you have to start all over again. I have already determined that I am going to have to work longer before retirement -- it has taken so many years to build up the small amount I currently have. I do plan to move the funds back into stocks once the market rebounds; however, I am planning to be extremely cautious during this current timeframe.
Irrational Exuberance
HR Specialist NASA Fri Oct 10, 2008 12:04 PM
Three thoughts:
1. Suppose the DOW at 14,000 was a fairly tale based on unrealistic hopes? When it hit 8,000 everybody was amazed and nobody thought it could ever get to 10,000.
2. If it never goes back up, we are going to have a lot of very OLD Federal employees because FERS is a joke without substantial TSP income, which is disappearing by the day. Forget any boomer retirement wave, for years to come.
3. Unfortunately, very rich people with millions and billions manage to manipulate the market and they are exacebating the current "panic" by selling/shorting stocks they do not really own, and never intend to own. This works very well for them as long as they buy them back at a cheaper price, before any rebound occurs, and is actually quite legal, but doing it in this atmosphere is ugly, approaching immoral. Would like to see a HUGE tax on excess profits made from shorting, vs normal capital gains taxes.
Re: Irrational Exuberance
Diversity Manager DOL Fri Oct 10, 2008 9:23 PM
I liken it to the 40% who pay no taxes having a vote for president. They don't have skin in the game but their votes counts just as much as mine
Re: Irrational Exuberance
worker government Tue Nov 25, 2008 11:31 AM
This is to diversity manager. Where do you get that 40% figure pay no taxes? Do they live on grates and pay no real estate taxes directly or indirectly? Do they buy only items that do not involve sales taxes? Perhaps they do not file income tax returns? Why do you say that 40% of the voting population do not file tax returns?
How many live on social security and investment income below the taxable income required to file a return? Of course you have a source for this information so please disclose this. If it is some outfit, please disclose its source.
I did not know paying taxes is a requirement to vote. I thought paying taxes is a requirement based on the Internal Revenue Code.
TSP Downturn
C.E. Tech USDA Forest Service Fri Oct 10, 2008 12:05 PM
At times like this I am glad I am in CSRS! Congress didn't do anybody a favor when they came up with FERS.
Re: TSP Downturn
worker government Tue Nov 25, 2008 11:34 AM
This was Reagan's idea. You know how "good" he was for the federal worker.
ECONOMY
ADMIN SPEC VHA Fri Oct 10, 2008 12:06 PM
So, didn't anyone see this mess getting ready to rear its ugly head?
Building, building, building, building and more building. More houses than buyers? Duhhhh, yes.
Huge vehicles being driven by one person. These vehicles may have been created for heavy duty work projects, but are being driven by one individual to and from work, or to and from the grocery store, or to and from pleasure trips. Didn't anyone wonder about gas prices? Duhhhhhh.
Looking for someone to blame? Look in the mirror.
Article Critique
District Manager Social Security Administration Fri Oct 10, 2008 12:11 PM
Ralph -
This was an excellent basic primer on how the markey is working these days amd some considerations investors need to be thinking about . Indeed, I think it's the best piece I've seen over the past past few weeks on the market turmoil.
Thanks,
'Nervous, but Hangin' On'!
I listened to them
Fed Employee Fed Agency Fri Oct 10, 2008 1:07 PM
and lost 45K +. So don't listen to them if you don't want to lose all your money.
Markets
Fed Worker DOD Fri Oct 10, 2008 1:19 PM
You know Ralph, everyone wants to use Warren Buffet as an example. He is a good one. So assuming that I want to follow it in my TSP I would be able to put 1.4% of my total portfolio in GE. Can I do that just like Warren does? No. I can apply the same reasoning as he does and when the market gets down to what I consider the ideal P/E ratio I will buy back in. I sold most stock last October because the Market was irrationally high. When the economy was sliding downward the stock market was at it's highest. This made no rational sense to me. Many people don't think of economics as a hobby. I have to admit that while the S&P 500 looks tempting right now, I am holding off. Many sell orders are being executed automatically, and I don't think the majority of institutional investors are done yet. There are many shares waiting to be dumped as of yet. I hope the bottom is only 20% away, that would be a decent stable place. After that it might be irrationally low.
Shrinking TSP
Revenue Agent IRS Fri Oct 10, 2008 2:21 PM
Yes, the market decline is a definite concern for everyone. Portfolio Paralysis says the 2 trades per month is too restrictive. Maybe I'm wrong, but I thought there were no restrictions on transfer of funds into the G fund. If that is the case, then you can still transfer funds into the conservative G fund if you don't trust the stock market. Personally, while I don't like what the stock market is doing right now, I am not changing any allocations because I know that it will rebound. Plus I have my money split between three separate funds and am in it for the long haul.
Move from the stock funds to G Fund
Retired DFAS Fri Oct 10, 2008 2:28 PM
I retired 28 Sep 07, and as of today I have lost a significant amount. This article said not to dump TSP stock funds and put the money into the G and F Funds, is this the same recommendation you suggest for us retirees who have chose not to start withdrawing yet? Thank you.
Crossing my fingers
IT Specialist VA Fri Oct 10, 2008 2:35 PM
Ralph, your advice has always been solid. While I'm in it for the long haul, with my TSP money still diversified across several funds (including C and I), my wife transferred all of her money to the G fund several weeks ago. While she is pleased with herself now, I'm trying to remain optimistic and wait for the day the stock funds rebound even higher and I can say to her, "I told you so" (and then sleep in the garage :) ). I also feel to some extent that I'm doing a patriotic duty by not pulling my money from the stock funds and showing my commitment to the soundness of our economy. Even if the market drops back to 1929 levels for the next 12 years (when I plan to retire), I'll still be able to retire - I'll just be a lot more financially comfortable if it rebounds. I'm hoping that history will remain the best predictor of the future. Thanks for your efforts to provide Federal employees with sound financial advice.
Stock market decline
Senior Attorney Social Security Administration Fri Oct 10, 2008 2:38 PM
The big hit that a lot of Federal employees took to their Thrift Savings Plan accounts ought to ease one of the problems the Federal goverment was facing, the "retirement tsunami" off baby boomers all leaving at the same time. Many will not be able to afford to retire for years after they expected to. However, this baby boomer is going next January. I lost a lot of money in my TSP over the last few days, but I wasn't going to touch it for a few more years anyway. Thank you CSRS!
Re: Stock market decline
Observer A Big One Fri Oct 10, 2008 5:30 PM
In this new world, of triple A rated investment grade bonds, & money market accounts, getting whacked, & a government facing heavy tax revenue reductions, don't sleep too easy. Your CSRS pension is among the safest, but this nightmare will go on for years. You may get a surprise or two.
Advice
Auditor DoD Fri Oct 10, 2008 3:48 PM
Good article. I pulled out of the C fund a year ago and went into the G fund. If you need the money within five years, you should not be in stocks. Pay attention to the leading economic indicators which tell you what will occur in six months or more. A year ago they were all negative. Capitulation is approaching and people with cash are buying.
Dont listen to the media, they do not have your interests in heart, only theirs. Read the book Wall Street Defense to see what is really going on written by a former insider. It is not a level playing field at all.
Re: Advice
govt drone NOAA Sat Oct 11, 2008 8:31 AM
Thats a great post from Auditor!!! There are a few points a lot of people fail to remember. There are a lot of post from people within a year (or 2 or 3) who say they lost a fortune during this crash. Well....what was your money doing in stocks at that point in the first place!!
If you put your money in G a year ago...you are golden...and should start thinking about moving it back. If you did not move a dime and still have it all in stocks (like me unfortunately)...yeah you took a loss...but all those shares you are buying now at 20-30% less will be worth a ton later on.
I still believe the lifecycle funds for your retirement date work. The current share prices reflect exactly what the fund brochures state (L2040 has tanked more then L2010...but will be worth much more in the long run)
It will be interesting to hear from folks who got out of stocks a year ago...and who put their money back in soon. I look forward to hearing how much you all made!
THE WRITING ON THE WALL
RETIRED FROM THE FED. VA/USAF Fri Oct 10, 2008 7:40 PM
It is a shame, that the study of history is a minor subject in the educationAL system of the USA. When we forget history, we are doomed to repeat it. As a railroad history buff, I saw this comming in December 2007. It is a cycle of business in the USA, but there were stronger indicators of this latest bull market. I told numerous close relatives to check their investments, and deposits. I told my wife, who is still working for the Fed., to place here funds in the G funds. She placed 90% in G, and 10% in S. She listens 90% of the time to me. The worst is not over. I predict it will bottom out around 7500. It's going to be a frightful, shocking, and bumpy ride, so hold on. It's October 2008.
Potential growth
Fed manager DOD (NAVSEA) Fri Oct 10, 2008 8:25 PM
With the newest venture of the government investing in bank stocks, the potential of a increase in T bills or G fund could be advantagous.
The G or F funds could posssibly be the way to maximize a greater growth
Re: Potential growth
worker government Tue Nov 25, 2008 11:41 AM
Be careful with bonds. If interest rates go up, you are hurting.
Better retirement
SA ICE Fri Oct 10, 2008 8:25 PM
It's time for Congress to look into the FERS retirement. We are not asking for a CSRS retirement, "but it would be nice"; what we need is a higher percentage instead of the 34% we'll get. OH, and lost 56K; ten years till retirement at 57...
Re: Better retirement
govt drone NOAA Sat Oct 11, 2008 8:33 AM
You should be able to recoup that.
Raising Taxes in a Down Economy
IT Specialist Private Sector Fri Oct 10, 2008 8:31 PM
This statement from the article struck me:
"The government has stepped in quickly to address the economic problems. The government raised taxes at the start of the Great Depression to offset the loss in government revenue significantly exacerbating the economic problems that already existed."
God help us if the next administration were to raise taxes as a "fix" for the economy. If that were to happen, we'll be in this mess for a lot longer.
I Resent Having to Gamble My Retirement
Photographer Veterans Administration Fri Oct 10, 2008 8:51 PM
I'm one of those evil market timing guys. I decided to move our money out of the market and into the “G Fund” in mid-October. Besides asking my wife to marry me it was probably the best decision I ever made. The next trick will be determining when to move back in. OK, I timed it right this time but I resent the fact that I have to gamble my retirement funds in the stock market at all. It is not fair to all of you who lost so much money.
It was wrong for Congress to change our retirement to the FERS system. Anyone who works thirty plus years for the government, or for any business for that matter, should be guaranteed a decent retirement. They should not have to hope they are in the work force during years when there is a good market and the shouldn’t be forced to invest their money in the hope that they get lucky and make enough to retire well. This is a system that has no parody, no guarantee of a decent retirement and no security.
We are supposed to be planning our retirement with three legs, one is our FERS retirement, the next leg is social security, and the last leg is our TSP accounts. Most of our TSP accounts have taken a big hit since last October. Next you’ll see your promised amount of social security cut. For most of us this three legged stool is getting mighty wobbly.
Best of LUCK to all.
(Unfortunately to retire comfortably you need luck. It’s not enough that you worked for the Government for thirty-five years.)
Re: I Resent Having to Gamble My Retirement
govt drone NOAA Sat Oct 11, 2008 8:36 AM
Photographer....GREAT post. Congrats on the smart financial move and the marriage!
While I agree with you that our retirement $$$ should not be gambling money...I wonder, will the "average" FERS retiree be better or worse off then the average CSRS retiree...everything else being equal.
I guess we won't know this for another 10-20 years...but it will be interesting to see.
Re: I Resent Having to Gamble My Retirement
Auditor DoD Sat Oct 11, 2008 2:35 PM
There are certain retirement rules when followed, significantly reduce the risk. In your 30s and 40s, stocks. 50s, start shifting to more conservative investments. Consult a Certified Financial Planner if you dont want to read all material thats out there, it's time consuming. I have been in the C fund for over 20 years and have done well. I am close to retirement and am 100 percent in the G and i plan on leaving it there.
Federal workers must be proactive in managing their retirement funds. Ignorance is not bliss and can lead to financial ruin.
Re: I Resent Having to Gamble My Retirement
App/Db Programmer USMC Mon Oct 13, 2008 11:02 AM
Photographer,
I really don't think what you did is 'market timing'. Personally, I think folks should be aware enough of market forces and the economy to shift their allocations between two or three allocation portfolios. That is, a conservative one, a middle of the road one, and an aggressive one (if you have the time to accept some loss).
However, if you put even 10 minutes a quarter into looking at your retirement account you will do better than the old retirement plan.
And, folks, guess what... Your CSRS retirement plan is probably invested in the L-Funds. You just don't see it. Market gets whomped, GetXers say they don't want to back-fill it, and you get less. See how that works. It is happening at the State and City levels right now!!!
TSP limits, and locked up on Friday
Jim_From_the_Field FAA Sat Oct 11, 2008 4:41 PM
Before you folks go blaming those who actively manage their TSP funds- I suggest you go look at the facts.
Costs for TSP have SOARED since they imposed trading limits.
Trading kept the costs down, not the other way around.
Visit the thirft board electronic reading room, pull up the meeting minutes, and get the data yourself.
Costs have INCREASED, not decreased, as a result of limiting trades to two per month.
One more thing-
Many people reported being unable to log in to TSP website on Friday, and more reported being unable to get through on the phones on Friday either.
And those who have already used up their two moves- they will now be locked into "G" until November.
I challenge you to see how much they will have lost come November 1st, by NOT being able to move back into stocks. I predict that the end of the month will be HIGHER, not LOWER, than we are now, and the trade limits are destroying those shareholder's chance to make it back.
Oil on Troubled Waters
Account Analyst (retired) USDA -- Forest Service Sun Oct 12, 2008 1:53 PM
Thank you for the calming and informative article. It's too bad that those of you who are still working and are able to put funds into the TSP are selling the cheap stocks. Take a deep breath and let it out slowly and stop the bleeding of your future. Most of the really good articles I've read keep telling us to buy into the declining funds and just sit on them for 6 months to a year. Let it grow for you...for too long we have been in the mode if "immediate satisfaction". We've also been told over and over that anything worth having is worth the wait. Breath in, Breath out, go for a walk and stop the panic!
Ready Or Not
Meteorologist NOAA Mon Oct 13, 2008 2:16 AM
Being within a few years of retiring, only a third of my kitty is in the CSI funds. I am holding my shares with no plan to sell. I am waiting for the signal to buy, and will double-up by putting in another third.
There is going to be a day when the funds go up a hundred basis points or more, and soon. Watch for that day! Be ready!
Meteorologist - Ready Or Not
App/Db Programmer USMC Mon Oct 13, 2008 10:52 AM
Meteorologist, we should be nearing - or at - a stock market bottom. Today seems like a bounce...
But, why are you gambling with your retirement future? Maybe you have other assets and TSP is more of a speculative resource where you can get some Alpha (bang). Your vacation money...
The L Funds give you some idea of the balance you should be holding. You are retiring in 2010, why is your allocation going to differ so much from the L-2010. Personally, I don't care for the allocations - but, they are starting points.
Unless you have 3 - 5 years of assets in the G fund after your trade back into the C/S/I than you are betting your house on a very volitile environment with little time to make the money back in good times.
For everyone, read:
'Buckets of Money', Ray Lucia (also has a very good daily radio show keyed on retirement planning)
'The Truth About Money', Ric Edelman
'The Lies About Money', Ric Edelman
Edelman has a Weekend show about finances that is great
Re: Meteorologist - Ready Or Not
Civil Engineer USACE Mon Oct 13, 2008 3:40 PM
If I was in the L2010 Fund like our Board is trying to force us into, then I'd only be down $47,000, instead of up $10,00 for the year. Do your own studying, because the FTRIB only has barclay's interest at heart. Just read the minutes and they even admit costs are going up, since liiting IFT's and they fooled almost all of you with this multiple trading running up costs. Open your eyes and take the time to read what's going on with your retirement! Eventually, guess who'll be paying to make this major mistake up and barclay's money shortfall.... yep you. I do my own homework and totally ignore the crap that the board puts out. They've already shown who they represent and want to protect.
Another Fed that has a brain
an Illustration
analyst DOD Mon Oct 13, 2008 3:58 PM
I wonder how many people got out of the market after it had already gone down (and therefore locked in losses) and won't realize todays 11% gain..
Re: an Illustration
IT DoD Mon Oct 13, 2008 10:59 PM
There will be more chances to buy back later. This temporary gains will probably be over in a couple days! During a recession, there are several "sucker rallies".
financial markets
nurse practitioner VA Tue Oct 14, 2008 10:31 AM
Can you explain derivatives. I read an article on this and it really stretches my imagination to believe that financial institutions can take a mortgage and state its value is based on stocks or some other commodity and then resell based on some kind of perceived value other than the real estate itself. Is the derivative the earning potential of the mortgagee?
market
tmu faa Tue Oct 14, 2008 4:56 PM
You sound like my broker, that advised me to invest in stocks instead of paying off my house.
FACT: If you had invested $1000 in the market in 1932, you would have had to wait until 1954 to be back to even again.
Re: market
programmer tso Wed Oct 15, 2008 8:02 PM
"If you had invested $1000 in the market in 1932, you would have had to wait until 1954 to be back to even again."
What index of the market are you using? There are several and they all have different histories.
Time Horizon
Fed Worker DOD Thu Oct 16, 2008 6:18 AM
As of this Friday I will be placing new contributions in C and I funds. The bulk of my nest egg is in G, however I think we are 2 to 3 thousand points from the bottom at worst and it is time to start picking up shares with new money. I am troubled by the way our expenses are rising and DO NOT trust Barclays and would prefer Vanguard. Since there is a 18 year time horizon until retirement, and intend to keep the TSP after retirement my actual time horizon is in excess of that so I am betting on the future, but carefully so.
Ric Edelman
Fed Worker DOD Thu Oct 16, 2008 10:44 AM
I have also listened to Ric Edelman and he basically is doing what any good Salesman does. He makes you think he is the expert, and then cons you into trusting him and handing over your money. He is basically a buy and hold guy that sells funds that do well (no problem here). He hates the TSP mostly because it follows the market and does it for less than he will charge. He can't get his greedy hands on your C fund. Which is the S&P 500 and is on sale now, so pick up your 2 for 1 special. Ralph is actually giving you better advice, and he has no percentage on your TSP.
Sorry I Invested
Fed Emp Federal Agency Fri Oct 17, 2008 9:45 AM
What a disappointment the once sought after TSP investment turned out to be. I will never regain the money lost, as I will be retiring in three years.
Re: Sorry I Invested
analyst DOD Fri Oct 17, 2008 5:25 PM
If you took a big hit because of the downturn in stocks and you're retiring in three years the problem is that you don't have the proper asset allocation for someone so close to retirement. The plan is not the problem, the way you're using it is the problem.
Widow's TSP Funds
Retired AF Civilian USAF Mon Oct 20, 2008 11:28 AM
Then there is the issue of my husband dying on Sep 21st and my reporting his death on the following day(Monday) to TSP. I only knew I had to report his death. When my head cleared some, I phoned TSP to find out what happened to his funds as the market was freefalling. First answer was the online account was frozen, and the funds go up and down. Continuing to get frantic over potentially losing my 'nest' egg and unable to move his funds myself to G fund to save the dollars, I kept phoning TSP 3 more times; each time getting a different answer to my question. My last response was that when the TSP17 was processed, the funds would move to G. So from date of death to October 6th, this widow lost money without any means to protect it. Anger is too mild a word for my feelings about TSP. I should never had reported his death as quickly as I did. Who knew? Certainly not me.
I only lost $1600.00 and I move
case query State Wed Oct 22, 2008 4:43 PM
I moved all of my money to the G fund in April. I'm the type of person who checks his tsp once a month. I was uaware of the downturn until I started realizing that I'm not gaining any money in my portfolio. Then I got my statement and saw a 1600 dollar drop. I tried to change it online but it didn't work and the following month in April, I called and had all of my stocks switched to the G fund. I'm happy I did because I know people where I work that have lost 20 to 70 thousand dollars. I feel like hero. I will be putting new cash investments into the C fund next month since the stocks are at 2002 levels. I feel like a hero. I don't believe in riding anything out, plus I don't surf.
Wild Swings
Mgt Analyst DOD Fri Oct 24, 2008 10:02 AM
Dow and S&P will continue to swing wildly for the next few years because so much money was pulled out. Now there is not enough volume to keep markets steady. One day up 400, the next day down 425...
I'm in the G and will be staying there for at least 2 years.
Stock Market Crash
richdor US Postal Service Fri Oct 24, 2008 10:24 AM
I am five months away from retirement. Although I knew the economic climate was turning ugly, it wasn't till a friend of ours who works for Wachovia bank in Charlotte gave my husband and I a stern warning about the worst was yet to come. I put everything in the G fund and moved monies from the mutual funds to safer territory. I would like to get back in the market at some point but for now, I am sleeping well and have the money I need to retire as I had planned.
Oh, No - Need Advice
Supervisor MEDCOM Fri Oct 24, 2008 11:24 AM
Since I can retire under the CRCS and am only using TSP to lower my income or as a savings plan, I am thinking of bailing out what I have now and dropping my TSP enrollment - Any comments/ideas whether or not I should do this? I keep seeing my contribution of over $300 a pay period going to nothing and the balance dropping.
Re: Oh, No - Need Advice
IT DoD Sat Oct 25, 2008 1:06 PM
The stock market goes down much faster than it goes up. I would move money into the G fund, you will have a chance to buy stocks later when the market starts going up.
Re: Oh, No - Need Advice
Instructor DoD Sat Oct 25, 2008 1:59 PM
I know CSRS may not have matching like FERS, but IMHO you'd be nuts not to buy shares at this level. 300 bucks isn't chump change but compared to the possible downside, the upside potential is enormous. As long as you have preserved any existing capital you have already, I'd be buying in with new money. In fact, that is what I'm doing right now.
The drops in value
worker government Tue Nov 25, 2008 11:18 AM
I started and continued my TSP in the G fund. I cannot say whether I was right or wrong, because a co worker said he has still done better doing the investment funds rather than the G fund.
I am considering putting a large amount of money in the C fund from the G fund. I do not know when or how much, but prices are down now and there is a great deal of pessimism. I am also a CSRS employee, so I will not depend on the TSP for much of my income when I finally retire.
Finally, it is normal to buy a house using mostly borrowed money. I can sumpathize with those who cannot pay because of illness, loss of jobs, or something similar. However, I do not sympathize with those who speculated or housing price increases, or had no doc loans, or those who overextended themselves. They should go through foreclosure and suffer the consequences. Those lenders should suufer the losses too. Maybe in the future they would be more careful
Article Fails to Adress Confiscation
Agent Deparnement Of Treasury Wed Nov 26, 2008 7:29 AM
Great article and I agree that markets go up and markets go down over time and yes people panic and should invest in long term..
I would however like to point out that the Senate has discussed confiscation of all pension assets.. Yes everyone says that this will never happen but dont be to sure that this is not going to happen. It is a possibilty although remote...
Portfolio Paralysis
DOD
Fri Oct 10, 2008 11:36 AM
It really stings with this new 2 trades per months policy for TSP. My hands are tied!! I was never one of the day traders, who brought this over bearing restriction. We need more than two per month & we need more fund choices, to do this job right.
Re: Portfolio Paralysis
State Dept in Washington DC
Fri Oct 10, 2008 11:54 AM
Re: Portfolio Paralysis
DoD
Fri Oct 10, 2008 6:11 PM
1. Before we start this noise about "Day Traders" lets be clear about one thing - you place a trade and it can take up to 48 hours to process, 48 hours - not instantly. This amounts to 2 trades a week. This is not day trading.
2. The handling of accounts is contracted out. What was never spelled out was what the costs were for handling a transaction. However, the "L" funds are rebalanced daily - what is the cost there?
3. Oh yes, and my biggest pet peeve - why is 21 percent of the C fund invested in financials? Or it was when I checked the leaflet about TSP. What were these people thinking?
Re: Portfolio Paralysis
DOD
Sun Oct 12, 2008 7:54 PM
That's part of the index. Do your homework.
Re: Portfolio Paralysis
government
Tue Nov 25, 2008 11:22 AM
I would have lost more, but that was all the mone
Centers for Medicare & Medicaid Services
Fri Oct 10, 2008 11:53 AM
Regarding this article, how can the TSP expect members to risk losing all of their funds in anticipation of the market rebounding? Are we supposed to sit and watch every dollar disappear? I guess it is fine if one has lots of funds to risk, but when you don't, it is difficult to watch every dollar disappear and know that you have to start all over again. I have already determined that I am going to have to work longer before retirement -- it has taken so many years to build up the small amount I currently have. I do plan to move the funds back into stocks once the market rebounds; however, I am planning to be extremely cautious during this current timeframe.
Irrational Exuberance
NASA
Fri Oct 10, 2008 12:04 PM
Three thoughts:
1. Suppose the DOW at 14,000 was a fairly tale based on unrealistic hopes? When it hit 8,000 everybody was amazed and nobody thought it could ever get to 10,000.
2. If it never goes back up, we are going to have a lot of very OLD Federal employees because FERS is a joke without substantial TSP income, which is disappearing by the day. Forget any boomer retirement wave, for years to come.
3. Unfortunately, very rich people with millions and billions manage to manipulate the market and they are exacebating the current "panic" by selling/shorting stocks they do not really own, and never intend to own. This works very well for them as long as they buy them back at a cheaper price, before any rebound occurs, and is actually quite legal, but doing it in this atmosphere is ugly, approaching immoral. Would like to see a HUGE tax on excess profits made from shorting, vs normal capital gains taxes.
Re: Irrational Exuberance
DOL
Fri Oct 10, 2008 9:23 PM
Re: Irrational Exuberance
government
Tue Nov 25, 2008 11:31 AM
How many live on social security and investment income below the taxable income required to file a return? Of course you have a source for this information so please disclose this. If it is some outfit, please disclose its source.
I did not know paying taxes is a requirement to vote. I thought paying taxes is a requirement based on the Internal Revenue Code.
TSP Downturn
USDA Forest Service
Fri Oct 10, 2008 12:05 PM
At times like this I am glad I am in CSRS! Congress didn't do anybody a favor when they came up with FERS.
Re: TSP Downturn
government
Tue Nov 25, 2008 11:34 AM
ECONOMY
VHA
Fri Oct 10, 2008 12:06 PM
So, didn't anyone see this mess getting ready to rear its ugly head?
Building, building, building, building and more building. More houses than buyers? Duhhhh, yes.
Huge vehicles being driven by one person. These vehicles may have been created for heavy duty work projects, but are being driven by one individual to and from work, or to and from the grocery store, or to and from pleasure trips. Didn't anyone wonder about gas prices? Duhhhhhh.
Looking for someone to blame? Look in the mirror.
Article Critique
Social Security Administration
Fri Oct 10, 2008 12:11 PM
Ralph -
This was an excellent basic primer on how the markey is working these days amd some considerations investors need to be thinking about . Indeed, I think it's the best piece I've seen over the past past few weeks on the market turmoil.
Thanks,
'Nervous, but Hangin' On'!
I listened to them
Fed Agency
Fri Oct 10, 2008 1:07 PM
and lost 45K +. So don't listen to them if you don't want to lose all your money.
Markets
DOD
Fri Oct 10, 2008 1:19 PM
You know Ralph, everyone wants to use Warren Buffet as an example. He is a good one. So assuming that I want to follow it in my TSP I would be able to put 1.4% of my total portfolio in GE. Can I do that just like Warren does? No. I can apply the same reasoning as he does and when the market gets down to what I consider the ideal P/E ratio I will buy back in. I sold most stock last October because the Market was irrationally high. When the economy was sliding downward the stock market was at it's highest. This made no rational sense to me. Many people don't think of economics as a hobby. I have to admit that while the S&P 500 looks tempting right now, I am holding off. Many sell orders are being executed automatically, and I don't think the majority of institutional investors are done yet. There are many shares waiting to be dumped as of yet. I hope the bottom is only 20% away, that would be a decent stable place. After that it might be irrationally low.
Shrinking TSP
IRS
Fri Oct 10, 2008 2:21 PM
Yes, the market decline is a definite concern for everyone. Portfolio Paralysis says the 2 trades per month is too restrictive. Maybe I'm wrong, but I thought there were no restrictions on transfer of funds into the G fund. If that is the case, then you can still transfer funds into the conservative G fund if you don't trust the stock market. Personally, while I don't like what the stock market is doing right now, I am not changing any allocations because I know that it will rebound. Plus I have my money split between three separate funds and am in it for the long haul.
Move from the stock funds to G Fund
DFAS
Fri Oct 10, 2008 2:28 PM
I retired 28 Sep 07, and as of today I have lost a significant amount. This article said not to dump TSP stock funds and put the money into the G and F Funds, is this the same recommendation you suggest for us retirees who have chose not to start withdrawing yet? Thank you.
Crossing my fingers
VA
Fri Oct 10, 2008 2:35 PM
Ralph, your advice has always been solid. While I'm in it for the long haul, with my TSP money still diversified across several funds (including C and I), my wife transferred all of her money to the G fund several weeks ago. While she is pleased with herself now, I'm trying to remain optimistic and wait for the day the stock funds rebound even higher and I can say to her, "I told you so" (and then sleep in the garage :) ). I also feel to some extent that I'm doing a patriotic duty by not pulling my money from the stock funds and showing my commitment to the soundness of our economy. Even if the market drops back to 1929 levels for the next 12 years (when I plan to retire), I'll still be able to retire - I'll just be a lot more financially comfortable if it rebounds. I'm hoping that history will remain the best predictor of the future. Thanks for your efforts to provide Federal employees with sound financial advice.
Stock market decline
Social Security Administration
Fri Oct 10, 2008 2:38 PM
The big hit that a lot of Federal employees took to their Thrift Savings Plan accounts ought to ease one of the problems the Federal goverment was facing, the "retirement tsunami" off baby boomers all leaving at the same time. Many will not be able to afford to retire for years after they expected to. However, this baby boomer is going next January. I lost a lot of money in my TSP over the last few days, but I wasn't going to touch it for a few more years anyway. Thank you CSRS!
Re: Stock market decline
A Big One
Fri Oct 10, 2008 5:30 PM
Advice
DoD
Fri Oct 10, 2008 3:48 PM
Good article. I pulled out of the C fund a year ago and went into the G fund. If you need the money within five years, you should not be in stocks. Pay attention to the leading economic indicators which tell you what will occur in six months or more. A year ago they were all negative. Capitulation is approaching and people with cash are buying.
Dont listen to the media, they do not have your interests in heart, only theirs. Read the book Wall Street Defense to see what is really going on written by a former insider. It is not a level playing field at all.
Re: Advice
NOAA
Sat Oct 11, 2008 8:31 AM
If you put your money in G a year ago...you are golden...and should start thinking about moving it back. If you did not move a dime and still have it all in stocks (like me unfortunately)...yeah you took a loss...but all those shares you are buying now at 20-30% less will be worth a ton later on.
I still believe the lifecycle funds for your retirement date work. The current share prices reflect exactly what the fund brochures state (L2040 has tanked more then L2010...but will be worth much more in the long run)
It will be interesting to hear from folks who got out of stocks a year ago...and who put their money back in soon. I look forward to hearing how much you all made!
THE WRITING ON THE WALL
VA/USAF
Fri Oct 10, 2008 7:40 PM
It is a shame, that the study of history is a minor subject in the educationAL system of the USA. When we forget history, we are doomed to repeat it. As a railroad history buff, I saw this comming in December 2007. It is a cycle of business in the USA, but there were stronger indicators of this latest bull market. I told numerous close relatives to check their investments, and deposits. I told my wife, who is still working for the Fed., to place here funds in the G funds. She placed 90% in G, and 10% in S. She listens 90% of the time to me. The worst is not over. I predict it will bottom out around 7500. It's going to be a frightful, shocking, and bumpy ride, so hold on. It's October 2008.
Potential growth
DOD (NAVSEA)
Fri Oct 10, 2008 8:25 PM
With the newest venture of the government investing in bank stocks, the potential of a increase in T bills or G fund could be advantagous.
The G or F funds could posssibly be the way to maximize a greater growth
Re: Potential growth
government
Tue Nov 25, 2008 11:41 AM
Better retirement
ICE
Fri Oct 10, 2008 8:25 PM
It's time for Congress to look into the FERS retirement. We are not asking for a CSRS retirement, "but it would be nice"; what we need is a higher percentage instead of the 34% we'll get. OH, and lost 56K; ten years till retirement at 57...
Re: Better retirement
NOAA
Sat Oct 11, 2008 8:33 AM
Raising Taxes in a Down Economy
Private Sector
Fri Oct 10, 2008 8:31 PM
This statement from the article struck me:
"The government has stepped in quickly to address the economic problems. The government raised taxes at the start of the Great Depression to offset the loss in government revenue significantly exacerbating the economic problems that already existed."
God help us if the next administration were to raise taxes as a "fix" for the economy. If that were to happen, we'll be in this mess for a lot longer.
I Resent Having to Gamble My Retirement
Veterans Administration
Fri Oct 10, 2008 8:51 PM
I'm one of those evil market timing guys. I decided to move our money out of the market and into the “G Fund” in mid-October. Besides asking my wife to marry me it was probably the best decision I ever made. The next trick will be determining when to move back in. OK, I timed it right this time but I resent the fact that I have to gamble my retirement funds in the stock market at all. It is not fair to all of you who lost so much money.
It was wrong for Congress to change our retirement to the FERS system. Anyone who works thirty plus years for the government, or for any business for that matter, should be guaranteed a decent retirement. They should not have to hope they are in the work force during years when there is a good market and the shouldn’t be forced to invest their money in the hope that they get lucky and make enough to retire well. This is a system that has no parody, no guarantee of a decent retirement and no security.
We are supposed to be planning our retirement with three legs, one is our FERS retirement, the next leg is social security, and the last leg is our TSP accounts. Most of our TSP accounts have taken a big hit since last October. Next you’ll see your promised amount of social security cut. For most of us this three legged stool is getting mighty wobbly.
Best of LUCK to all.
(Unfortunately to retire comfortably you need luck. It’s not enough that you worked for the Government for thirty-five years.)
Re: I Resent Having to Gamble My Retirement
NOAA
Sat Oct 11, 2008 8:36 AM
While I agree with you that our retirement $$$ should not be gambling money...I wonder, will the "average" FERS retiree be better or worse off then the average CSRS retiree...everything else being equal.
I guess we won't know this for another 10-20 years...but it will be interesting to see.
Re: I Resent Having to Gamble My Retirement
DoD
Sat Oct 11, 2008 2:35 PM
Federal workers must be proactive in managing their retirement funds. Ignorance is not bliss and can lead to financial ruin.
Re: I Resent Having to Gamble My Retirement
USMC
Mon Oct 13, 2008 11:02 AM
I really don't think what you did is 'market timing'. Personally, I think folks should be aware enough of market forces and the economy to shift their allocations between two or three allocation portfolios. That is, a conservative one, a middle of the road one, and an aggressive one (if you have the time to accept some loss).
However, if you put even 10 minutes a quarter into looking at your retirement account you will do better than the old retirement plan.
And, folks, guess what... Your CSRS retirement plan is probably invested in the L-Funds. You just don't see it. Market gets whomped, GetXers say they don't want to back-fill it, and you get less. See how that works. It is happening at the State and City levels right now!!!
TSP limits, and locked up on Friday
FAA
Sat Oct 11, 2008 4:41 PM
Before you folks go blaming those who actively manage their TSP funds- I suggest you go look at the facts.
Costs for TSP have SOARED since they imposed trading limits.
Trading kept the costs down, not the other way around.
Visit the thirft board electronic reading room, pull up the meeting minutes, and get the data yourself.
Costs have INCREASED, not decreased, as a result of limiting trades to two per month.
One more thing-
Many people reported being unable to log in to TSP website on Friday, and more reported being unable to get through on the phones on Friday either.
And those who have already used up their two moves- they will now be locked into "G" until November.
I challenge you to see how much they will have lost come November 1st, by NOT being able to move back into stocks. I predict that the end of the month will be HIGHER, not LOWER, than we are now, and the trade limits are destroying those shareholder's chance to make it back.
Oil on Troubled Waters
USDA -- Forest Service
Sun Oct 12, 2008 1:53 PM
Thank you for the calming and informative article. It's too bad that those of you who are still working and are able to put funds into the TSP are selling the cheap stocks. Take a deep breath and let it out slowly and stop the bleeding of your future. Most of the really good articles I've read keep telling us to buy into the declining funds and just sit on them for 6 months to a year. Let it grow for you...for too long we have been in the mode if "immediate satisfaction". We've also been told over and over that anything worth having is worth the wait. Breath in, Breath out, go for a walk and stop the panic!
Ready Or Not
NOAA
Mon Oct 13, 2008 2:16 AM
Being within a few years of retiring, only a third of my kitty is in the CSI funds. I am holding my shares with no plan to sell. I am waiting for the signal to buy, and will double-up by putting in another third.
There is going to be a day when the funds go up a hundred basis points or more, and soon. Watch for that day! Be ready!
Meteorologist - Ready Or Not
USMC
Mon Oct 13, 2008 10:52 AM
Meteorologist, we should be nearing - or at - a stock market bottom. Today seems like a bounce...
But, why are you gambling with your retirement future? Maybe you have other assets and TSP is more of a speculative resource where you can get some Alpha (bang). Your vacation money...
The L Funds give you some idea of the balance you should be holding. You are retiring in 2010, why is your allocation going to differ so much from the L-2010. Personally, I don't care for the allocations - but, they are starting points.
Unless you have 3 - 5 years of assets in the G fund after your trade back into the C/S/I than you are betting your house on a very volitile environment with little time to make the money back in good times.
For everyone, read:
'Buckets of Money', Ray Lucia (also has a very good daily radio show keyed on retirement planning)
'The Truth About Money', Ric Edelman
'The Lies About Money', Ric Edelman
Edelman has a Weekend show about finances that is great
Re: Meteorologist - Ready Or Not
USACE
Mon Oct 13, 2008 3:40 PM
Another Fed that has a brain
an Illustration
DOD
Mon Oct 13, 2008 3:58 PM
I wonder how many people got out of the market after it had already gone down (and therefore locked in losses) and won't realize todays 11% gain..
Re: an Illustration
DoD
Mon Oct 13, 2008 10:59 PM
financial markets
VA
Tue Oct 14, 2008 10:31 AM
Can you explain derivatives. I read an article on this and it really stretches my imagination to believe that financial institutions can take a mortgage and state its value is based on stocks or some other commodity and then resell based on some kind of perceived value other than the real estate itself. Is the derivative the earning potential of the mortgagee?
market
faa
Tue Oct 14, 2008 4:56 PM
You sound like my broker, that advised me to invest in stocks instead of paying off my house.
FACT: If you had invested $1000 in the market in 1932, you would have had to wait until 1954 to be back to even again.
Re: market
tso
Wed Oct 15, 2008 8:02 PM
What index of the market are you using? There are several and they all have different histories.
Time Horizon
DOD
Thu Oct 16, 2008 6:18 AM
As of this Friday I will be placing new contributions in C and I funds. The bulk of my nest egg is in G, however I think we are 2 to 3 thousand points from the bottom at worst and it is time to start picking up shares with new money. I am troubled by the way our expenses are rising and DO NOT trust Barclays and would prefer Vanguard. Since there is a 18 year time horizon until retirement, and intend to keep the TSP after retirement my actual time horizon is in excess of that so I am betting on the future, but carefully so.
Ric Edelman
DOD
Thu Oct 16, 2008 10:44 AM
I have also listened to Ric Edelman and he basically is doing what any good Salesman does. He makes you think he is the expert, and then cons you into trusting him and handing over your money. He is basically a buy and hold guy that sells funds that do well (no problem here). He hates the TSP mostly because it follows the market and does it for less than he will charge. He can't get his greedy hands on your C fund. Which is the S&P 500 and is on sale now, so pick up your 2 for 1 special. Ralph is actually giving you better advice, and he has no percentage on your TSP.
Sorry I Invested
Federal Agency
Fri Oct 17, 2008 9:45 AM
What a disappointment the once sought after TSP investment turned out to be. I will never regain the money lost, as I will be retiring in three years.
Re: Sorry I Invested
DOD
Fri Oct 17, 2008 5:25 PM
Widow's TSP Funds
USAF
Mon Oct 20, 2008 11:28 AM
Then there is the issue of my husband dying on Sep 21st and my reporting his death on the following day(Monday) to TSP. I only knew I had to report his death. When my head cleared some, I phoned TSP to find out what happened to his funds as the market was freefalling. First answer was the online account was frozen, and the funds go up and down. Continuing to get frantic over potentially losing my 'nest' egg and unable to move his funds myself to G fund to save the dollars, I kept phoning TSP 3 more times; each time getting a different answer to my question. My last response was that when the TSP17 was processed, the funds would move to G. So from date of death to October 6th, this widow lost money without any means to protect it. Anger is too mild a word for my feelings about TSP. I should never had reported his death as quickly as I did. Who knew? Certainly not me.
I only lost $1600.00 and I move
State
Wed Oct 22, 2008 4:43 PM
I moved all of my money to the G fund in April. I'm the type of person who checks his tsp once a month. I was uaware of the downturn until I started realizing that I'm not gaining any money in my portfolio. Then I got my statement and saw a 1600 dollar drop. I tried to change it online but it didn't work and the following month in April, I called and had all of my stocks switched to the G fund. I'm happy I did because I know people where I work that have lost 20 to 70 thousand dollars. I feel like hero. I will be putting new cash investments into the C fund next month since the stocks are at 2002 levels. I feel like a hero. I don't believe in riding anything out, plus I don't surf.
Wild Swings
DOD
Fri Oct 24, 2008 10:02 AM
Dow and S&P will continue to swing wildly for the next few years because so much money was pulled out. Now there is not enough volume to keep markets steady. One day up 400, the next day down 425...
I'm in the G and will be staying there for at least 2 years.
Stock Market Crash
US Postal Service
Fri Oct 24, 2008 10:24 AM
I am five months away from retirement. Although I knew the economic climate was turning ugly, it wasn't till a friend of ours who works for Wachovia bank in Charlotte gave my husband and I a stern warning about the worst was yet to come. I put everything in the G fund and moved monies from the mutual funds to safer territory. I would like to get back in the market at some point but for now, I am sleeping well and have the money I need to retire as I had planned.
Oh, No - Need Advice
MEDCOM
Fri Oct 24, 2008 11:24 AM
Since I can retire under the CRCS and am only using TSP to lower my income or as a savings plan, I am thinking of bailing out what I have now and dropping my TSP enrollment - Any comments/ideas whether or not I should do this? I keep seeing my contribution of over $300 a pay period going to nothing and the balance dropping.
Re: Oh, No - Need Advice
DoD
Sat Oct 25, 2008 1:06 PM
Re: Oh, No - Need Advice
DoD
Sat Oct 25, 2008 1:59 PM
The drops in value
government
Tue Nov 25, 2008 11:18 AM
I started and continued my TSP in the G fund. I cannot say whether I was right or wrong, because a co worker said he has still done better doing the investment funds rather than the G fund.
I am considering putting a large amount of money in the C fund from the G fund. I do not know when or how much, but prices are down now and there is a great deal of pessimism. I am also a CSRS employee, so I will not depend on the TSP for much of my income when I finally retire.
Finally, it is normal to buy a house using mostly borrowed money. I can sumpathize with those who cannot pay because of illness, loss of jobs, or something similar. However, I do not sympathize with those who speculated or housing price increases, or had no doc loans, or those who overextended themselves. They should go through foreclosure and suffer the consequences. Those lenders should suufer the losses too. Maybe in the future they would be more careful
Article Fails to Adress Confiscation
Deparnement Of Treasury
Wed Nov 26, 2008 7:29 AM
Great article and I agree that markets go up and markets go down over time and yes people panic and should invest in long term..
I would however like to point out that the Senate has discussed confiscation of all pension assets.. Yes everyone says that this will never happen but dont be to sure that this is not going to happen. It is a possibilty although remote...