350Z's 2007 I Fund Thread

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From the article found by Mlk__Man...

"However, these competing explanations do not fit very well the case of mutual fund splits. [3] Existing transaction cost and constraint-driven explanations of a trading range do not apply, since mutual funds do not trade in ticks and any transaction costs or trade size restrictions are not related to share prices. Also, in a recent paper, Rozeff (1998) finds that splitting funds do not subsequently outperform non-splitting funds."

Very interesting!

I'd still like to see a split at 30 (2 to 1, back down to $15.00)...
 
Frixxxx said:
Ok,

If anyone would like to chime in on a debate in my office about the I Fund: here's your chance.

Hypothetically---

Now, we all know the I Fund is not a stock. Stocks behave differently and funds are at the mercy of the manager. Now, the question that is posed and debated in my office (very heatedly) is that one day the share prices of the fund will have to be enticing for people to "buy in". I.E. If the I fund gets to $50/share, a GS-05 saving $75 into TSP will not want to get 1.5 shares. So, to keep it enticing, they may "split" the shares to keep the price down (marketing). I personally cannot see this happening, BUT I'm not an expert.

Any takers?:D
Click to expand...


You can not just split one fund's price and not the others! Never going to happen. PERIOD!!!!!!!!
 
Frixxxx said:
Ok,

If anyone would like to chime in on a debate in my office about the I Fund: here's your chance.

Hypothetically---

Now, we all know the I Fund is not a stock. Stocks behave differently and funds are at the mercy of the manager. Now, the question that is posed and debated in my office (very heatedly) is that one day the share prices of the fund will have to be enticing for people to "buy in". I.E. If the I fund gets to $50/share, a GS-05 saving $75 into TSP will not want to get 1.5 shares. So, to keep it enticing, they may "split" the shares to keep the price down (marketing). I personally cannot see this happening, BUT I'm not an expert.

Any takers?:D
Click to expand...

As far as splitting any stock into anything less than the cost of one share, I would say no. I think you put forward a really good question, but I’m not sure of the answer, I guess you could talk to the TSP folks in Louisiana (877-968-3778) for clarification. But, if I were to bet, I would say that they round it off not to exceed your deposits / contributions and to purchase the maximum number of shares without splitting any single share price. Good question!

As far as I know, the “I” Fund is a stock fund that is a culmination of 21 different country stock exchanges all lumped into one. The two largest slices (50%) of the foreign exchange “I” Fund stock pie is Japan (NIKKEI index) and the UK (FTSE100 index)… The remaining 19 foreign exchanges are all less than 7 % or less each. For this reason, you can monitor the NIKKEI when it opens Sunday thru Thursday at 8:00pm EST and the FTSE 100 when it’s open Monday am UTC thru Friday. The really tricky part is the ever changing foreign currency fluctuations that are in a constant flux. Plus the FV which is somewhat predictable, but as far as a fixed formula, I have never seen it. Good luck with your TSP investing! :cool::cool:
 
Frixxxx said:
Ok,

If anyone would like to chime in on a debate in my office about the I Fund: here's your chance.

Hypothetically---

Now, we all know the I Fund is not a stock. Stocks behave differently and funds are at the mercy of the manager. Now, the question that is posed and debated in my office (very heatedly) is that one day the share prices of the fund will have to be enticing for people to "buy in". I.E. If the I fund gets to $50/share, a GS-05 saving $75 into TSP will not want to get 1.5 shares. So, to keep it enticing, they may "split" the shares to keep the price down (marketing). I personally cannot see this happening, BUT I'm not an expert.

Any takers?:D
Click to expand...

Maybe I don't understand what you are getting at. When I look at my account on the TSP website, I have a whole number and up to 4 decimal places for each fund that I own. So, if the shares are $50, and his contribution is $75, he WILL get 1.5000 shares. :confused:
 
Frixxxx said:
Ok,

If anyone would like to chime in on a debate in my office about the I Fund: here's your chance.

Hypothetically---

Now, we all know the I Fund is not a stock. Stocks behave differently and funds are at the mercy of the manager. Now, the question that is posed and debated in my office (very heatedly) is that one day the share prices of the fund will have to be enticing for people to "buy in". I.E. If the I fund gets to $50/share, a GS-05 saving $75 into TSP will not want to get 1.5 shares. So, to keep it enticing, they may "split" the shares to keep the price down (marketing). I personally cannot see this happening, BUT I'm not an expert.

Any takers?:D
Click to expand...

Would probably never happen.

When the share system went from monthly trades, to being able to do a "daily" trade back in - (what was it, 2003 or so?), the "new shares" were all repriced to be equal to ten dollars a share on the date of inception.

But other than that, there is no reason to change the way share prices are determined. Barclays has no incentive or profit motive involved in luring investors one way or another, because there is no sales commission per share, and there is fractional ownership --i.e. you can buy 1.223 shares if you like, you are not required to purchase only in round numbers of shares. therefore, there is no incentive to change the share pricing, nor would I ever expect it to be so.

The fact that you can do fractions of shares makes our funds such that there is no reason to change.

This is different from other funds. For example, if you were a fan of Warren Buffet, you'd want to buy a share of stock in Warren's company. But you can't buy a fractional share of that.

The most expensive share of stock available on the New York exchange is Berkshire Hathaway-
(symbol BRKA ) http://finance.yahoo.com/q?s=BRKA


Today, trading at just over $110,000 a share.

Anyway, that's my 2 cents.

Tell your coworker to buy TSP stock funds anyway. they're a good deal in the long run.
 
Thanks for the responses on my "HYPOTHETICAL" question.

I tried to show that it would never happen. Their issue was perception on the buy of the share. I told them what a few said here. it's not so much the price of the share, or part of a share, but the interest earned on the money. Some people were getting caught up on the decimal/fraction and not looking at the percentage rates.

Overall, I have gotten more people here to contribute the 5% to get the match. It's talks like these that keep them interested. I will probably write a book on this called "Interested int the Interest".

Thanks everyone,

Frixxxx, aka "The Cincinnati Kid"
 
I have also encouraged and advised new members and some existing members of our workforce to at least contibute enough to get the company match.It's kind of satisfying to help someone protect his/her future.
 
12%ayear said:
seems like we are getting there for the +fv...your thoughts?
Click to expand...

EFA would need to close at 83.8 or above to have a + UV.

Yesterday, I didn't have a dog in the fight. Today, I'm buying the I-fund so I'm don't want a +UV but a -UV would be great!
 
Greg said:
EFA would need to close at 83.8 or above to have a + UV.

Yesterday, I didn't have a dog in the fight. Today, I'm buying the I-fund so I'm don't want a +UV but a -UV would be great!
Click to expand...


I'm showing the dollar up....I don't think there is enough movement for an FV. But it's speculation on my part.
 
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