TSP officials eye limits on trades

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One solution that would work for me is to charge for trades, and then move the IFT deadline to the end of the trading day.
 
If they do start changing their policies, we could do a petition against it.

But if we can't do anything about it, then I might pull my TSP account and put it in Rydex or Direxion funds that pays 2X the I-fund and on top of that I will be able to short it too with a 2.5X return. :)
 
It would depend on the policy changes. If they allowed a couple of changes per week, then a nominal fee of a couple bucks per trade after that, then it wouldn't be so bad... Even if I ran up a bill of a couple hundred bucks a year, it would be insignificant vs the gains for the service.

However, I think they should have to demonstrate that the expense of setting up a system to track, account for, bill and audit the trades and fees would be justified (given the statisticaly few participants who do trade often). That compared to the trading costs incured by constantly rebalancing the various L funds.

The majority of Feds still just leave their money in the G fund...

On the one hand they want Feds to be more actively involved in managing their fund, on the other, they just don't want them to be too active.

And, how about the 10 million (of TSP money) they spent promoting the L funds to participants?

Might be time to organize a TSP Participant Citizen Investors Watchdog group to monitor the FRTIB!
 
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If this is going to be a fee for service proposition, it would only be fair then to bill the L funders for constantly rebalancing their accounts (the cost of the trade, as well as the cost of the contracter who handles the management of the L funds.)
 
I am not opposed to a small transaction fee if these transactions do cost the Plan money. But I also agree with BeaverState that the L-funds are more active than anything we can ever do.

SkyPilot makes some excellent points as well.
 
I would imagine the L funds transactions are highly automated. I would also imagine frequent trades could be highly automated, if they're not already.
 
tsptalk said:
I am not opposed to a small transaction fee if these transactions do cost the Plan money. But I also agree with BeaverState that the L-funds are more active than anything we can ever do.
Click to expand...

I thought the "L" funds are rebalanced only once per month.

Am I mistaken?
 
James48843 said:
I thought the "L" funds are rebalanced only once per month.

Am I mistaken?
Click to expand...

From Tsp.gov

The L Funds provide you with a convenient way to diversify your account among the G, F, C, S, and I Funds, using professionally determined investment mixes that are tailored to different time horizons. Your “time horizon” is the date (after you leave Federal service) that you think you will need the money in your TSP account. Because it is important for each L Fund to maintain its target investment mix, the TSP will automatically rebalance each L Fund daily. Then, each quarter, the investments in each L Fund will shift to a slightly more conservative mix. In addition, experts will review the investment mixes periodically to be sure they are still appropriate.
 
This must have been a topic for discussion at the last board meeting. We'll get to see what they said in about a month or so. They have discussed this in the past. In the past they have looked at what the overall annual cost is and the annual cost has significantly gone down. They were actually projecting that the cost this year should also be lower.

The real budget buster is the FV. The TSP has both made a mint and lost their collective shirt this year with the FV. Back in February they had gained so much off of the FV that caught a lot of folks jumping at the wrong time that they had effectively paid for all the transactions cost for the year and had a surplus. Then in May it went back the other way as a bunch of folks got a big benefit from the FV that took most of those gains back.

The transaction cost are only big when we have a lot of big swings and people make a bunch of moves all in the same direction at the same time. Otherwise during less turbulent times our trades tend to cancel each other out as some people move into I fund are offset by others moving out. These amounts also tend to be less than the daily infow of money into the system and rejuggle of the L's. This means that their transaction cost are offset by just changing the percentages on that days buys from incomming money.

Bottom line, I wouldn't mind if they gave us say 25 trades a year and then charged us a few bucks for trades beyond that. I do however agree that any decision that is made when looking at the private sector is weighed against our limited trading deadline. The private sector is paying for that trading service and immediate execution of trades. If we don't get immediate execution then we should not have to pay the same rate. JMHO.
 
SkyPilot said:
Might be time to organize a TSP Participant Citizen Investors Watchdog group to monitor the FRTIB!
Click to expand...

Now THERE's an idea I can support.

Perhaps we can put together a TSPTALK watchdog group, and issue our own press releases, and ask to meet with the board.
 
CountryBoy said:
Here they go again. :mad:

http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20070904/NATION06/109040043

CountryBoy
Click to expand...
The article says "As Bethesda-based financial planner Dennis Gurtz said, people who attempt to time the market, or guess when it has peaked and tanked, "have to be right twice: when they go out and when they return." He said being out of the market on just 10 or 12 key days can reduce the overall return for that year."

I say - Being out of the market 10 or 12 days can also increase your return for the year.

The article went on to say "In March, roughly 35,000 TSP investors moved about $1.7 billion from the stock index funds — mostly the I Fund — into the Treasury securities or bond funds."

I say - The I-fund had risen over 20 percent in the 12 months prior to March. Taking some profits would have been a conservative move at that point. Thus locking in the gains. Matter of fact, if my math is right, year to date, you'd be up around 11 percent had you switched all your money out of the I Fund and into the F fund at the end of March.
 
FundSurfer said:
Bottom line, I wouldn't mind if they gave us say 25 trades a year and then charged us a few bucks for trades beyond that. I do however agree that any decision that is made when looking at the private sector is weighed against our limited trading deadline. The private sector is paying for that trading service and immediate execution of trades. If we don't get immediate execution then we should not have to pay the same rate. JMHO.
Click to expand...

I could probably go with your 25 trades a year and then a few bucks for trades beyond that the way it is set up now.

But, if we can't get immediate execution why pay at all. Give us immediate exectution and move the trading deadline to end of day.

They seem to want to push for some change with all this lately.

Just some quick thoughts here with it all.
 
Does anyone think this will be an issue Congress will want to tackle going into an election year? Just curious.
 
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