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Return to Article: TSP activity increases following stock market plunge

• 21734
  

  "Cracked & Wired", did I just see that dead cat bounce? Thanks for the heads up.

  Tip off

  GovExec.com reader Posted March 14, 2007 9:37 AM
• 21539
  

  As of 3/5/2007, I have lost over $8,000 in the TSP, C, I and S funds. I'll lose more today.

  I'm an annuitant also. I'm not sweating it either, history proves it.

  Two things folks, I'm not timing the market by pulling my money out now and neither should you.

  I'm staying put. Even though I'm not contributing to the TSP (CSRS Annuitant), the fund shares will eventually rebound and regain their loses.

  Unless you are a professional, and I mean professional market timer, it's best to keep your shares as is, don't panic; most market timers lose.

  If you hastily withdrew your money out after the correction started, you had no business being in equities to begin with, period.

  With gain comes risk, if you can't stomach the market fluctuations, stay with the government fund and fixed income!

  You won't need the Maalox and Pepcid AC.

  GovExec.com reader Posted March 5, 2007 5:25 PM
• 21538
  

  Prior to August 2000 I had all my money in the market. I started moving it out in August, and eventually had it all in the G fund for a couple of years. That turned out to be a good decision for me, because the market tanked for quite a while, and I kept earning interest. I started moving money back into the market in late 2002, and now have only about 40% in the G fund, the rest in market funds. Currently my new contributions are going into market funds.

  The reason I didn't move anything this time, is because this is likely a temporary dip in the market, and here is how I would LOSE money if I did that. To make the math simple, suppose I had $2,000 in the S fund (100 shares at $20/share). Let's say the S fund dropped to $18/share. If I do nothing, then when the price comes back up to $20/share I will be where I was when it dipped, owning 100 shares at $20/share for a fund value of $2,000.

  Now suppose instead of waiting this out, I jump ship to the G fund. My 100 S fund shares that are currently worth $18 each allow me to buy $1800 worth of G fund shares. Let's say the G fund is at $12/share, so I now have 150 shares in the G fund. Let's say that holds steady, the S fund comes back to $20 and I feel comfortable investing in the S fund again. So, I take my G fund shares and move them to the S fund. My $1800 worth of G fund shares now will only buy 90 shares in the S fund (remember it is now $20/share). Instead if having 100 shares worth $10/share, I now have 90 shares at $1,800/share. I lost $200 by moving my money to the G fund and then moving it back.

  Even if the G fund grows to 12.02 (big growth for the G fund) during this time, my 150 shares are only worth $1,803 so when I move that back to the S fund, I still have lost $197.

  Be really careful about moving your money around for short term blips in the market. You will lose money that way. If you can't stand any fluctuation, then consider putting it into the G fund and ignore the market fluctuations.

  GovExec.com reader Posted March 5, 2007 3:43 PM
• 21521
  

  Moving your retirement funds to safety while the markets go through this 10% correction is a smart move. As this past Friday showed, the bottom hasn't been reached yet with more of the same predicted this coming Monday.

  GovExec.com reader Posted March 3, 2007 6:51 AM
• 21519
  

  Ok, so maybe moving my money wasn't the smartest thing in the world, but on top of losing a few hundreds that day, the TSP did not increase my balance by the contributions I made this pay period. So I lost and I lost. I'm within a year of retirement, CSRS, and could not afford to contribute until about 15 years ago. I can't afford to gamble -- it isn't a game -- this is my future. I didn't lose pennies, I lost about two thousand. And the market is still going down. L fund? I lost a bundle on that the first several months. Can't afford that either. I'm careful with my paycheck and I'm careful with my TSP.

  GovExec.com reader Posted March 2, 2007 10:21 PM
• 21485
  

  Beware the dead cat bounce. This is going to be a wonderful trading environment throughout the spring & summer. Seven come eleven baby!

  Cracked & Wired Posted March 1, 2007 2:47 PM
• 21474
  

  This is so sad and people wonder why there is so much worry and concern about changing the Social Security system to one like the TSP fund where people would be responsible for moving and administering their own accounts.

  These people moved over $400,000,000 (yes, Virginia that is over $400 million) out of the I, C, & S funds on Wednesday after they lost $.74, $.55, & $.65 cents respectively on Tuesday.

  Instead of staying for it to rebound and only feel the loses on paper, they actually moved the money and since the G & F funds tend to move more slowly, they may never recoup those loses, as they will not be back in the funds in time to regain them, since some have rebounded the next day and they missed those gains already.

  It is so sad that they fail to see the long term investment strategy.

  Instead they are also losing out on the idea of buying now that they have lost money and are really bargains. The best advice is to move money from the G to these funds now thereby buying them at a lower price.

  I would have preferred to have had the CSRS when I was hired, but alas I am in the FERS, so at least I need to take advantage of the bargains, but just think what would happen if Social Security were like this and FERS employees were losing doubly by moving that money as well.

  Mike Patterson Posted March 1, 2007 9:57 AM