Are the traders hurting the funds? Or Helping...

[NVJims]

One item that has not been examined is by pulling money out of a fund while it is dropping and putting it back in at a lower price, there have performance gains by the entire fund. The fund managers have to sell some of the investments to 'redeem' shares that are being switched to other funds, and they have to repurchase investments, most likely at a lower price, to generate shares when the money comes back in... These will far exceed any trading costs. The 'frequent' traders have actually improved the returns for all. They are just looking at the trading costs (commissions, etc), not at the gains due to the manager's trading...

Cheers!
Jim

 

[Show-me]

Now that would not work cuz Ms. Ray wants you to ride it to the bottom and work up from there.

Welcome to the message board and thank you for posting.

 

[poolman]

Welcome to TSP, Do your homework, Read, Read, Read, and you will be fine.

 

[James48843]

One item that has not been examined is by pulling money out of a fund while it is dropping and putting it back in at a lower price, there have performance gains by the entire fund. The fund managers have to sell some of the investments to 'redeem' shares that are being switched to other funds, and they have to repurchase investments, most likely at a lower price, to generate shares when the money comes back in... These will far exceed any trading costs. The 'frequent' traders have actually improved the returns for all. They are just looking at the trading costs (commissions, etc), not at the gains due to the manager's trading...

Cheers!
Jim

You are correct- go take a look at the most recent newsletter over at http://tspshareholder.org/newsletters

It says that frequent traders MADE money for the buy-and-hold crowd.

I don't know why the Thrift Board wants to cut off millions in income for everyone. It's simply not prudent fund management.

 

[NVJims]

OK, why hasn't this information been put out there to the masses? I just happened to think this up this morning when I saw the article at FedSmith.com

Jim

 

[poolman]

How do you get this information to the masses?

Fedsmith won't write about it. Steven Barr won't write about it. They are all just taking the Thrift Board's word for it.

If you have any ideas how to enlighten the 3.8 million people out there who are about to get screwed by the Thrift Board, I'm all ears.

Jim,

Any ideas over and above what has been discussed here, We are all open ear's. Seem's like you have not read what is going on around here.

 

[hessian]

I'd recommend sending as much info as possible to retirement organizations - these groups all have tremendous resources;
are all commonly involved in legal actions; and,
also, have HUGE lobby influence with members in Congress.

Here's a few (some are DoD-specific, but DoD has many civilian workers (and, also especially active, and veteran military groups - which I know less of active/retired military) - but, these are for sure HIGHLY influencial!

http://www.narfe.org/departments/hq/guest/home.cfm

http://www.afge.org/Index.cfm?Page=Retirees1

http://www.nage.org/federal/leg_process.shtml

http://www.military.com/benefits/military-pay/thrift-savings-plan
(more active and vetern-military specific)

 

[Hallatauer]

When any of these discussions come up I conciously avoid the words trading and traders. I'm transfering my money between funds... it's an Inter Fund Tranfer (IFT) not a trade. A trade takes place almost instantaneously... my transfer takes almost 24 hours to take place. JMTC