< 1 pct. IFT Option

[nasa1974]

Re: <1%IFT Option

JB45, Good job.

Medic,

If you have not selected the "last" page choice I would recommend you do this. The first couple of posts expand on what JB45 explained. I have found that if you want to keep your risk low that you want to keep 5% or less in the FCSI funds when planning to use the <1% option. As SB has explained the purpose of doing <1% is to try and better the G fund. Keep asking questions. Good Luck.

 

[WorkFE]

Re: <1%IFT Option

<1%IFT Guru's,
Just out of curiosity. Is it not true that whether the market goes up or down is irrelevant. By rebalancing dailey to your initial numbers you win.
Either you move small gains into the G or you replenish shares at a lower cost. Seems to me you don't have to put alot of thought into it. When you are out of IFT's.
As a reminder if you did this yesterday you used an IFT, <1% or not.

It is simplicity at its best.

 

[nasa1974]

Re: <1%IFT Option

<1%IFT Guru's,
Just out of curiosity. Is it not true that whether the market goes up or down is irrelevant. By rebalancing dailey to your initial numbers you win.
Either you move small gains into the G or you replenish shares at a lower cost. Seems to me you don't have to put alot of thought into it. When you are out of IFT's.
As a reminder if you did this yesterday you used an IFT, <1% or not.

It is simplicity at its best.

Actually it is not that simple. There are a few factors that affect your daily balance in both shares and dollars. I will try to put a much better explaination together either later tonight or over the weekend. I want to make sure the explaination makes sense. The one thing to remember is that everything takes place at COB that day. Your account balance, shares and percentages all take place and adjust at the end of the day and you are making a best guess before noon EST.

 

[KevinD]

Re: <1%IFT Option

or you replenish shares at a lower cost.

In a down trend, more shares equals more risk.

 

[WorkFE]

Re: <1%IFT Option

That depends if you believe this market is undervalued, as most do, or you believe the market has revalued itself to its true value.
If you put all your TSP investment in the Garage in Oct. 07 and moved it to the CSI in beginning of March 09, in the undervalued scenario you be sitting in the perfect storm. In the revalued scenario you saved losses.

 

[Guest2]

Re: <1%IFT Option

<1%IFT Guru's,
Just out of curiosity. Is it not true that whether the market goes up or down is irrelevant. By rebalancing dailey to your initial numbers you win.
Either you move small gains into the G or you replenish shares at a lower cost. Seems to me you don't have to put alot of thought into it. When you are out of IFT's.
As a reminder if you did this yesterday you used an IFT, <1% or not.

It is simplicity at its best.

WorkFe, you've explained the two positve views quite well. Simply put,
you described rebalancing your Funds, just like the (L) Funds do. Unlike
the (L) Funds, you have the power over your percentages. Well Done !

One experience I've had should be shared with all. When I first started
the <1%IFT, my goals (in a Bear Market) were way too high and way
too long. Yes, I could have continued to purchase shares cheaper until
the market rebounded. But the Bear ran steep drops and my balance
was shrinking way to fast for my tolerance. I quickly found out that it
was best for ME to set short term goals and expectations. Some retirees
may understand (even at these levels) that,,,,,Risk Can Kill ! :worried: Now, I
look for better results than the average (G) offers on a per day basis. If
I can't beat the current (G) Fund Rate over,,,,say,,,,,the last 7 trading
days of the month, I'm Gone,,,Bail,,,Bail,,,Bail,,,Out Of There ! After
all, Come the beginning of the next month, I have a fresh start. For some,
this can be used all of the time, but for ME, its only a suppliment to the
real action and profit I want to generate through the 2 UnRestricted IFT's.

 

[Guest2]

Re: <1%IFT Option

In a down trend, more shares equals more risk.

That also depends on the amount of time you have left to invest AND
if we're closer to the bottom then upper resistance in the midst of a
Bear market rally. I Think !

 

[Guest2]

Re: <1%IFT Option

That depends if you believe this market is undervalued, as most do, or you believe the market has revalued itself to its true value.
If you put all your TSP investment in the Garage in Oct. 07 and moved it to the CSI in beginning of March 09, in the undervalued scenario you be sitting in the perfect storm. In the revalued scenario you saved losses.

Well said, share accumulation last year was a BAD Thing ! The Market
dumped -40% or more of our hard earned money. Now figure how long
it would take to break even with all them shares trading sideways, up,
down and in between. I just had this conversation with a co-worker last
night. He's a buy & Hold'er and adds Future Contributions into the same
Funds. Currently, he is -12% YTD. The C,S,and I are down between 11%
- 15% YTD. I am -8% YTD. I don't know about you, but I'll take the -8%
and continue my "insideous behavior" over all of them.

 

[Guest2]

Re: <1%IFT Option

Ooops, a little off topic here ! My Bad ! Lets take this to the other threads
or your own as i truely wish to dedicate this thread to the topic "<1%IFT.

Thanks My Friends !

 

[Guest2]

Re: <1%IFT Option

The Basics:

If you invested 10% into a Fund and that Fund goes UP, the next day you
should see your percentage change in that Fund (unless the gain was too
insignificant to register an increase) ie.... 10%-------->10.02%

That 10.02% will allow you to do a <1%IFT and Boost it to 11.00%
-----------------------------------------------------------------------

If you invested 10% into a Fund and that Fund goes DOWN, the next day
you should see your percentage change in that Fund (unless the loss was
too insignificant to register a decrease) ie.... 10%-------->09.98%

That 09.98% will allow you to do a <1%IFT and Boost it to 10.00%
-----------------------------------------------------------------------
Where the money comes from will depend on what you did with all the
Fund during the <1%IFT. This get alittle more complicated to explain,
so I'll just stick to the Basics for now.

 

[Guest2]

Re: <1%IFT Option

The Basics:

If you do a <1%IFT when your Fund has 2.0% (whole number) AND you
enter the same exact 2% before noon, this is called rebalancing (just
like the (L) Funds do). Your forcing the percentages to stay the same,
no matter what the market does during the day that you made the
<1%IFT. At the end of the day, different things will happen;

a) The Fund Closes Up. Instead of 2.01% being in your account the next
day, you have only 2% again. So you removed that .01% from that fund.
You'll be re-buying shares in that fund. Whether you see an increase or
decrease of shares in that fund will be determined on how well or bad
your overall account does, as your buying 2% of your New Updated
Account Balance and putting that money back into that fund.

b) The Fund Closes Down. Instead of seeing 1.99% in your account,
you'll see 2% again on the next day. You've repurchased shares at
the lower closing price and added shares to the fund. Yes, you had
a loss on that day and this will not change by doing a <1%IFT. But
your accumulating shares on a down day. I tend to wait for two down
days before pumping the percentages up. Some might refer to this as
DCA'ing (Dollar Cost Averaging).

 

[Medic72]

Re: <1%IFT Option

very well put all of you, i get it now )))))

all the little changes at the end of the day that are different from your allocation, you can either go up to the next % if it went up, or move it back to the original and actually buy more at a lower price to equal it out.

cool, now to see if i can do it, or even should do it.

thanks again!

 

[KevinD]

Re: <1%IFT Option

REMEMBER! Your first 2 IFT's are your 2 IFT's for the month. Don't waste them on a <1% move.

 

[Guest2]

Re: <1%IFT Option

REMEMBER! Your first 2 IFT's are your 2 IFT's for the month. Don't waste them on a <1% move.

I couldn't agree more. Nicely put, Thank Kevin !

One last point, there are members so close to retirement OR who are
actually in retirement who've opted to utilize this method to enhance
there accounts, without exposing themselves to high risk. Those who
utilize this method for those purposes may have goals to do a <1%IFT
as their only strategy and thus, start the month off at <1%IFT levels.
Everyones circumstances and goals are different, but one MUST know
that ANY IFT counts towards the 2 per month limit. Even a <1%IFT.

This additional commentary came out of a conversation with a fellow
staff member WHO STILL thought his first move back to the (G) did
not count towards the 2 per month limit. IT DOES. If your in a Fund
and your first move for the month is to move money back into the
(G) Fund from that Fund, IT COUNTS ! Public Service Announcements
should come from the FRTIB, but we all know thats not happening !

 

[nasa1974]

Re: <1%IFT Option

"Originally Posted by WorkFE <1%IFT Guru's,
Just out of curiosity. Is it not true that whether the market goes up or down is irrelevant. By rebalancing dailey to your initial numbers you win.
Either you move small gains into the G or you replenish shares at a lower cost. Seems to me you don't have to put alot of thought into it. When you are out of IFT's.
As a reminder if you did this yesterday you used an IFT, <1% or not.

It is simplicity at its best.

Actually it is not that simple. There are a few factors that affect your daily balance in both shares and dollars. I will try to put a much better explaination together either later tonight or over the weekend. I want to make sure the explaination makes sense. The one thing to remember is that everything takes place at COB that day. Your account balance, shares and percentages all take place and adjust at the end of the day and you are making a best guess before noon EST."


I worked on a couple of scenarios of <1% vs Buy and Hold using the 2009 numbers through March. I started the 2009 investment year with $100,000.00 in all scenarios. I can post my worksheet if anyone would like to see my work in total. Now on the <1%, I already had the up and down days right in front of me so it made my choice much simpler than if I would have made up my mind before noon EST. However, I will say that you pretty much knew on a day to day basis how good or how bad the day was looking before noon.
My <1% I started at 80,5,5,5,5 GFCSI. I maintained a steady 5% in the F fund (not a big fan of F). I used the G and F funds to purchase shares in the CS&I funds all the way through March. My first Buy & Hold I also used 80,5,5,5,5. My second Buy & Hold I used 30,35,35 CSI. My next three Buy & Holds where 100% C, S & I. Again I started out every January with $100,000.00. Remember the higher the percentages in each fund the greater the risk.

I made a total of 31 IFT's January through March. In March 4 days could have gone either way.
-----------------------------------------------------------------------
Scenario #1 - <1% 80,5,5,5,5 $100,000.00 Starting shares per fund;

G-6278.2029 F-399.4759 C-454.3302 S-400.1537 I-343.6851

At the end of March the shares looked like this;

G-3467.6553 F-384.1063 C-1685.9437 S-1437.1840 I-1386.2542

A difference of; G-786.5365 F-14.2221 C-326.8606 S-270.2538 I-348.3617

At the end of March the account was worth $97,424.41 for a loss of $2,575.59.
-----------------------------------------------------------------------
Scenario #2 Buy & Hold 80,5,5,5,5 GFCSI

At the end of March the account was worth $98,371.36 for a loss of $1,628.64.
-----------------------------------------------------------------------

For scenarios 3, 4, 5 & 6 January and February where negative months and March ended positive.

-----------------------------------------------------------------------
Scenario #3 Buy & Hold 30,35,35 CSI

At the end of March the account was worth $85,572.43 for a loss of $14,427.57.
-----------------------------------------------------------------------
Scenario #4 Buy & Hold 100 C

At the end of March the account was worth $86,295.76 for a loss of $13,704.24.
-----------------------------------------------------------------------
Scenario #5 Buy & Hold 100 S

At the end of March the account was worth $87,481.59 for a loss of $12,518.41.
-----------------------------------------------------------------------
Scenario #6 Buy & Hold 100 I

At the end of March the account was worth $83,043.26 for a loss of $16,956.74.

 

[XL-entLady]

Re: <1%IFT Option

So Nasa, my friend, I was reading your post below and if I got it right (and I may not have - - today is a heavy meds day) it looks like you ended up with a lot more CSI shares than you lost in G? So you ended up with a net gain in equity shares that would have almost covered the dollar loss? Did I understand that correctly?

TIA,
Lady

 

[nasa1974]

Re: <1%IFT Option

So Nasa, my friend, I was reading your post below and if I got it right (and I may not have - - today is a heavy meds day) it looks like you ended up with a lot more CSI shares than you lost in G? So you ended up with a net gain in equity shares that would have almost covered the dollar loss? Did I understand that correctly?

TIA,
Lady

I would say yes as long as you maintained your position until the market started to trend positive and then made a move back to your original percentages.

Let me add this. I forgot to mention that on the <1% scenario the percentages ended in March at 45.64%, 4.97%, 16.08%, 16.13% and 17.19%.

I did not get into April but if I add the first 3 trading days of the month I would have to answer your question with a resonding YES as long as I decided on April 3rd to go back to my original 80,5,5,5,5. If I had done this I would have increased my account by $3,370.89 over the March closing. On April 3rd the account was worth $100,795.30 and I would have almost doubled the G fund from 3379.5969 shares to 6287.6222 shares.

 

[nasa1974]

Re: <1%IFT Option

For what it is worth over a 3 month and 3 day period of trading using the <1% option I gained $795.30. Talk about being a high roller.

OK folks I did the calculations (if they are correct:suspicious now you analyze it. Let me know if you want me to post the Microsoft XL sheet.

 

[Guest2]

Re: <1%IFT Option

Boy do I have to catch-up on some reading !
Looks like early morning reading !
Be back soon !

 

[Guest2]

Re: <1%IFT Option

"-----------------------------------------------------------------------
Scenario #1 - <1% 80,5,5,5,5 $100,000.00 Starting shares per fund;

G-6278.2029 F-399.4759 C-454.3302 S-400.1537 I-343.6851

At the end of March the shares looked like this;

G-3467.6553 F-384.1063 C-1685.9437 S-1437.1840 I-1386.2542

A difference of; G-786.5365 F-14.2221 C-326.8606 S-270.2538 I-348.3617

At the end of March the account was worth $97,424.41 for a loss of $2,575.59.
------------------------------------------------------------------------------------------
Scenario #2 Buy & Hold 80,5,5,5,5 GFCSI

At the end of March the account was worth $98,371.36 for a loss of $1,628.64.
-------------------------------------------------------------------------------------------

Thanks Nasa for the Hard Work !
From your post (as with Lady, I hope I got it right):

Scenario#1 gained shares by the end of March (share accumulation)
based on their purchases at a lower costs per share. This scenario
lost more in the way of dollars, as opposed to;

Scenario#2 B&H did not gain shares as the market fell. The Buy & Hold
resulted in a lesser loss, but maintaned the same share amounts that
were originally purchased in January.

I can't help but think that given enough time, when share prices ultimately
reached their original January Price, the Buy & Hold (Scenario#2) would be
left in the dust. Further, the "break even" point in dollars would come that
much quicker because of the accumulation of more shares.

(IMHO) Any Levels greater then 5% are beyond the goal of beating the
(G) Fund. I use this as a alternative measure, in lieu of 100% (G)arage.

If you have 20.0%(G) 40.01%(C) and 39.99%(S):

Performing a <1%IFT after reaching the monthly limit can indeed
happen. But I fear that one might get lost in the method instead
of facing the reality that "RISK" is already high and that the 0.01%
becomes truely "INSIGNIFICANT" compared to possible losses or
gains one can be exposed to. This is why I never use percentages
greater then 5% and stay focused on the (G) Fund's rate of return
during the remaining days of the month. Short and Sweet. It's nice
to know that you could bump the (C) Fund up to 41%, but not as
an ongoing strategy.