James48843
TSP Talk Royalty
- Reaction score
- 569
This you have to read to believe.
Remember the folks over at the FRTIB? Who declared we shouldn't move anything around, and took away our ability to react to market movements? ??
Read this story, from Federal News Radio- interview with none other than FRTIB spokeman Tom Trabucco:
---------------------------------------------------
Investor confidence in TSP stock funds increases July 14, 2009
By Dorothy Ramienski <mailto:dramienski@federalnewsradio.com>
Internet Editor
FederalNewsRadio
Investors in both the Thrift Savings Plan and private sector funds have
been wary since the stock market crash last year, but are things looking
up overall for the market?
There's no way to really predict the future, but Tom Trabucco, Director
of External Affairs for the Federal Retirement Thrift Investment Board,
talked about what it means to be an active investor on Monday's Daily
Debrief.
"[An active investor] is somebody who changes their stock position,
generally, based on the anticipated market movement. These are folks who
look ahead and rather than being in the mode where they just want to
diversify and track the markets, they sense that things are starting to
happen and they might want to go a little bit heavier in the stocks and
out of bonds."
Trabucco says this type of investor also has a goal of "beating the
market," which can actually be done with the TSP.
"As you know, we have the five investment funds, so if you anticipate
that large cap stocks are going to have a good performance in the coming weeks or months, you can move more of your funds into the stock market and into the C fund, particularly."
He notes that this is, in fact, already happening. The second quarter
has, thus far, been full of good news for investors and TSP participants
are taking advantage of that by moving money from safer funds, such as
the G fund, into riskier funds like the C.
"Folks were transferring money out of the C fund every month, net, last
year -- and every month this year through March; however, beginning in
March and for April and May and into June, it was a net [amount] going
into the C fund via interfund transfers."
There is more money going into the various stock market funds through
contributions now, as well, when compared to a few months ago.
"In January of last year, 33 percent of new contributions were going
into the G fund . . . with 27, 9, and 13 percent, respectively, going
into the C,S and I funds. In March of this year, 47 percent of the money
was going into the G fund, so that's a pretty big upturn of folks who
were getting their contributions out of the market and putting it into
the safety of government securities. That number has trimmed a bit and
it's back to 45 percent."
There are those investors who did decide to stay the course and leave
their money alone. Trabucco says this might have been a better
alternative than taking it out and performing interfund transfers.
"If you miss just one or two or three big days in the market over the
course of a year, you may miss out on positive returns for that entire
year. . . . The TSP is set up to work best [so that] you have these
broad, diversified funds and that you track the market over the long
haul. Remember, the market reacts to all kinds of inputs that it gets
from millions of investors every day making tens of millions of
decisions. So what you really do is benefit from all of those decisions
that are being made by other folks who are following the market very
closely."
He reminds all investors to look at what is best for them individually
and not rely solely on blanket statements about investing.
-----------------------------------------------------------
So....buy and hold is ok, says the FRTIB's spokesman.
And now Buy if you think the C fund is about to have a run.
BUT WAIT- If you bail out into "G", and then want to move back into "C", the FRTIB took away your opportunity to do so, until next month.
Haarummpphh.
Remember the folks over at the FRTIB? Who declared we shouldn't move anything around, and took away our ability to react to market movements? ??
Read this story, from Federal News Radio- interview with none other than FRTIB spokeman Tom Trabucco:
---------------------------------------------------
Investor confidence in TSP stock funds increases July 14, 2009
By Dorothy Ramienski <mailto:dramienski@federalnewsradio.com>
Internet Editor
FederalNewsRadio
Investors in both the Thrift Savings Plan and private sector funds have
been wary since the stock market crash last year, but are things looking
up overall for the market?
There's no way to really predict the future, but Tom Trabucco, Director
of External Affairs for the Federal Retirement Thrift Investment Board,
talked about what it means to be an active investor on Monday's Daily
Debrief.
"[An active investor] is somebody who changes their stock position,
generally, based on the anticipated market movement. These are folks who
look ahead and rather than being in the mode where they just want to
diversify and track the markets, they sense that things are starting to
happen and they might want to go a little bit heavier in the stocks and
out of bonds."
Trabucco says this type of investor also has a goal of "beating the
market," which can actually be done with the TSP.
"As you know, we have the five investment funds, so if you anticipate
that large cap stocks are going to have a good performance in the coming weeks or months, you can move more of your funds into the stock market and into the C fund, particularly."
He notes that this is, in fact, already happening. The second quarter
has, thus far, been full of good news for investors and TSP participants
are taking advantage of that by moving money from safer funds, such as
the G fund, into riskier funds like the C.
"Folks were transferring money out of the C fund every month, net, last
year -- and every month this year through March; however, beginning in
March and for April and May and into June, it was a net [amount] going
into the C fund via interfund transfers."
There is more money going into the various stock market funds through
contributions now, as well, when compared to a few months ago.
"In January of last year, 33 percent of new contributions were going
into the G fund . . . with 27, 9, and 13 percent, respectively, going
into the C,S and I funds. In March of this year, 47 percent of the money
was going into the G fund, so that's a pretty big upturn of folks who
were getting their contributions out of the market and putting it into
the safety of government securities. That number has trimmed a bit and
it's back to 45 percent."
There are those investors who did decide to stay the course and leave
their money alone. Trabucco says this might have been a better
alternative than taking it out and performing interfund transfers.
"If you miss just one or two or three big days in the market over the
course of a year, you may miss out on positive returns for that entire
year. . . . The TSP is set up to work best [so that] you have these
broad, diversified funds and that you track the market over the long
haul. Remember, the market reacts to all kinds of inputs that it gets
from millions of investors every day making tens of millions of
decisions. So what you really do is benefit from all of those decisions
that are being made by other folks who are following the market very
closely."
He reminds all investors to look at what is best for them individually
and not rely solely on blanket statements about investing.
-----------------------------------------------------------
So....buy and hold is ok, says the FRTIB's spokesman.
And now Buy if you think the C fund is about to have a run.
BUT WAIT- If you bail out into "G", and then want to move back into "C", the FRTIB took away your opportunity to do so, until next month.
Haarummpphh.
- No need to respond, Birchtree - I was just Just kidding.
