Return to Article: Fair Trade
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50284
TSP is a retirement fund, not a brokerage account. IRAs and other retirement vehicles have restrictions that differentiate them from brokerage accounts, and there is no reason TSP should be any different. Some people see TSP as "our money", but it isn't. The matching funds do not belong to the employee for some time, as those who quit and try to withdraw their TSP money find. The employee contribution is "ours", and there is no reason freewheelers can't and shouldn't go instead to to ScottTrade, ETrade, or any other place they like; they are not required to participate. Those who think they've made big money with frequent moves may have done so, but they can also lose it just as quickly. Remember the late-80s stock market crash? Gambling Fever is not confined to Las Vegas and Jersey City; I know - but will not name - persons who made normally-good investments and are now bankrupt or fighting it off. I don't want those people influencing how I live at the end of my life. Investing is a form of gambling in which risk is controllabe to a greater or lesser degree. Those who have to use their "winnings" to put food in their mouths need to be very careful about not only their purchases, but anything else that can have an impact on it. Those who want to high-roll should go to a casino.
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49489
For the millions of Government workers who either supported the restrictions or who did nothing you got what you wanted. Now instead of maybe gaining a percent or two in a qtr. you can still lose 8-10%. You won't imagine how important this was until you retire on 1% a year. A few minutes a week and a little knowledge could make a big difference. It's not to late... pay attention to your retirement.
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48908
Allowing frequent, fast, and furious trading by TSP subscribers is not only bad money managment for a retirement fund, it is costing all subscribers money. Do these super traders have any idea what online traders charge for transactions -- and they want them for free? Current limits are reasonable in my mind. I think it is prudent stewardship for the TSP board to charge a market fee for excess transactions.
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48844
(DevilInDetails) "By the way, rarely used, limiting transaction abusers to paper transactions is a FULLY LEGAL and APPROVED measure"
Yup, those participants who had a legal right to make unlimited Interfund Transfers should be considered "abusers" now. GIVE ME A BREAK ! It's quite simple, Limits haven't been past into Law yet. Limits are still in the review stage at the Federal Registry. Imposing a penalty "mail restrictions" onto any Fed for this reason is Illegal. And now, they do it for exercising their 1st Amendment rights. By the way, only a FRTIB crony would utilize the word "Rebalancing" and attempt to justify Illegal behavior. Do us all a favor and go back to your boss and tell him that they have good reason to be worried. Personal and Professional Liability is a very Public and scary thing.
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48780
I think the overriding consideration is to protect the right of each TSP subscriber to conduct transfers as they wish while at the same time keeping costs low in order to maximize their investment of available funds. I think the solution is easy and has already been proposed: Charge a fee for any IFTs exceeding a set number of trades (I think three are sufficient) per month. Anyone wishing to use the TSP for day trading can, but it will cost them - just as it does in any trading house.
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48759
Let say they set it at 2 trades per month; what does this mean to me? Perhaps someone can help my understanding...
Suppose, I reballance my accounts on the 2nd day of a month and with money in each of the five funds (not the L's) this means money shifts in/out of each fund to adjust percentages. Will this be 1, 4 or 5 trades (into the G fund is free, but not out)?
Then, in week 3, I see an opportunity in two funds that should increase in value because of economic trends (for ex. the S & I funds) and I expect the F fund will do poorly. I then reballance to move some money from G & F into S & I (with a stable position in C). Is this 1, 2 or 4 trades I have made?
To emphasize this point - in the last week of the month, I recognize that the C Fund will likely underperform the other funds and I decide to reballance to redistribute my C fund. Is this 1 more trade or 2? It will not matter because under the new rules I have exceeded ny "2" trades & I must wait until next month...
How will the Board determine how to count the trades? Have I used my two "events" as 2 trades or 9 trades??? Would my third "trading event" be prohibited - even though I am certainly NOT a frequent trader?
Who is to say how & when they will change what gets counted (or not counted) as a trade?
This is a solution without a problem... We are debating the trading impact on costs which range on the order of $5-10 a YEAR per PERSON. While I believe that people should not abuse the system - I fail to see how the above senareo would do that. I am only exercising the responsibility which the system has placed on me - to be accountable & responsible for the success of my own retirement accounts. There are other viable and far less draconian measures which can be taken. (By the way, rarely used, limiting transaction abusers to paper transactions is a FULLY LEGAL and APPROVED measure).
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48628
"TSP Legislative Director Thomas Trabucco said on Tuesday that officials will not consider comments or establish final rules until the comment period is over. "I expect it will be at least a few days until we have something to say," he said."
Look at that quote from Director Thomas Trabucco - the FRTIB has no established rules yet targeted a specific group. Froze their accounts, forced members to mail the IFT's wasting more time and money. The FRTIB is throwing bricks and lives in a glass house. The same group wasted how many millions Mr. Trabucco since 2000 possibly close to 100 Million and the brick throwers of the FRTIB are quilty in this matter. They spent $300,000 mailing letters about saving money. Audit, Audit, Audit...Congressional Investigation and the DOL must get involved. They are out of control. The track record in 2003 was $36 Million wasted and the Senate took them on. A woman who is relentless from Maine Senator Susan Collins demanded accountability and look what she uncovered. Time for the same news outlets the FRTIB uses to sell their bogus information to investigate the messenger. A good place to begin would be a Freedom of Information Request. If you want the facts you won't get it for this crew. Please get the fair and balanced real facts.
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48621
I just gotta say this. For those who call multiple IFT's "day trading" need to get a better education and try to understand that the fight isn't over 2,3,4 IFT's. The fight is over "Your Right" to do so and not to be snowed into believing false or distorted information. That is the true fight. Stop with the labels, its not "day trading" and wake up to the truth before it bites you in your wallet. Thank You For Your Time !
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48613
Kath,
Just because a few posters use the same language doesn't necessarily mean that it's a form letter. I frequently cut/paste from several comments so as to accurately capture ideas word-for-word, and then add my own to it. If you read the two "twisted the data" posts you will see that this is the case, they are not identical form letters signed by different folks. You are correct, however, in that there is a "network" of TSP members fighting these limits, and we are using petitions, form letters, and all other legal methods to do so - as opposed to the illegal snail mail restrictions imposed by FRTIB on 500+ TSP shareholders. Penalizing someone for following existing law and not complying with a PROPOSED change that isn't even on the books yet? Does that sound legal?
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48602
The TSP funds are not stocks, bonds, or commodities; they are essentially mutual funds and not designed for "Day Trading".
If all these folks are so interested in playing Day-Trader with their retirement security, then why don't they change their TSP contribution to the minimum required to maintain full agency-matching (or less if they are feeling particularly unwise), and transfer their balance into the L-Fund that matches their desired level of risk. They could then direct the funds they free up into an E-Trade account or the like.
Those accounts are better suited for this purpose and will ultimately give them more flexibility while not impacting the bottom line of those of us who prefer to look at the long term rather than chasing the market day to day. Plus, their TSP account could then become a more conservatively invested retirement source that could help offset some of the inherent dangers of day trading.
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48563
The TSP is not set up for "day trading", and while most people like to try and beat the market, they will not. However, there are a few different alternative strategies considering the 2 intrafund transfers per month. You could change your allocation for each paycheck so that you are dollar cost averaging into differernt % of funds each paycheck. Also, another thing I have found successful was transferring in bulk to a safety net (G fund) while there was a lot of negativity and slowly buying back into the C, S, and I funds with a transfer. Last summer I sold my C, S, and I funds into the G fund and I have slowly bought back in at different points when the funds were 10-15% below where I sold. One of the reasons we are able to have the lowest expense ratio of any investment in the country is because of regulations and restrictions. You either get 2 transfers per month or have to pay higher transaction costs, can't have your cake and eat it too!
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48477
Intelligence Officer by Day, Day Trader by Day
It's about time the TSP stopped the practice of government workers using their accounts for day trading. Lets call it what it is!
It's bad enough that we have people day trading with their private IRAs or stocks online. I've got a friend who works in intelligence who told me that he worked with a guy who resigned to become a day trader. How all of a sudden was he able to do that? Anyone with brains would figure out that he was able to do this because for years he was practicing day trading while on the government payroll. After all this, from what I heard he failed as a day trader and the government hired him back. If he had desk job that didn't mean much then I would understand, but if he's an intelligence officer shouldn't he have more important things to do than be a day trader while being paid by the government? It's a joke!
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48376
For FERS participants, TSP is our retirement system. The TSP system was intended to allow us to control our risk. It is impossible to do so in market conditions such as those that currently exist with only two IFTs per month.
It also seems absurd that we all have to pay to do a daily rebalancing (read transfers) of all of the money in the L funds. Yet, the costs of participants making three or four IFTs in a month from time to time is a big deal?
In the end it does not matter, because FRTIB appears to have already reached its decision to proceed with this rule regardless of TSP participant comments.
Shame on FRTIB!
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48370
The average costs to TSP Participants went down from $4.13 per participant in 2006 to $3.55 in 2007. This isn't per interfund transfer, this is per YEAR! Costs per shareholder are going DOWN! What is the problem again?
The FRTIB cites the I fund as the main source of trade costs. Many have offered a simple solution: do not report the share price until 0700 hours the next day. That takes away the fair valuation and allows Barclays to set an actual price for the I fund, rather than guess what the price will be and make us all pay the difference for their wrong guesses.
There are better ways to bring down the costs of our plan. Truth be told, the costs as they are right now are not so bad compared to the private sector. The limitations are not necessary.
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48366
The "twisted the data" postings here show that the TSP board is not the only form letter initiator. The "smart" "free traders" have established their own action network. I put my money into the Thrift SAVINGS Plan to for my retirement but now fear I must move my SAVINGS away from uncontrolled "frequent trade activity" by frantic, fanatic, gambling traders "who choose to manage their TSP accounts." I have other mutual funds where there are reasonable controls and higher management fees. I have bank accounts and credit cards that "change the rules" and inform me in the mail with the current statement. Where does "free trading" go from here? The future TSP may have enough funds to influence market swings, a simple tip to the "smart" network, a little insider-type trading to "make their accounts grow" "following the existing rules" to be sure, what's the harm? After all "the TSP funds are our money."
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48359
I retired early a little over 8 months ago. The reason I was able to do so was my TSP investments. I made more then $100,000 in profit in the last 24 months. The reason I was able to do that was to be able to trade-sometimes even daily. I evaluated the market every morning. Had I still been involved with the old rules-where we could trade once a month-I would not have been very sucessful. Had I been able to make more than one trade per day-I'd be a millionare. You can't time the market with 2 trades a month! You will loose unless you are satisfied with the G Fund, very safe, but without any real profits when adjusted for inflation.
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48345
I'm all for keeping the TSP's costs to a mimimum, and limiting the number of trades allowed is one important way to do that. I find it amazing that 24 trades per year is not enough for some feds.
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48342
It's a travesty that the Federal Retirement Thrift Investment Board (FRTIB) has twisted the data and waged a campaign against those who manage their TSP account in a style contrary to the "buy and hold" approach that they are trying to cram down our throats. The TSP fund fact sheets show that administrative costs for TSP have fallen each of the past three years. For all of 2007 the costs were 1.5 basis points which is 0.015%, compared to 0.030% for 2006. The facts published in the reports are contrary to the FRTIB's campaign to reduce trading costs by restricting the frequent trade activity of those to choose to manage their TSP accounts based upon free enterprise and the rules established four years ago. I condemn the FRTIB for spending hundreds of thousands of dollars on this ill-advised and unnecessary campaign against TSP members who are simply trying to manage their retirement funds following the existing rules. I'm also disgusted with some of our Union representatives who not only have failed to look at the data on declining costs offered by FRTIB, they apparently also don't even understand the issue here, (it's not "day-trading", Mr Perkinson!).
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48338
It's a travesty that the Federal Retirement Thrift Investment Board (FRTIB) has twisted the data and waged a campaign against those who manage their TSP account in a style contrary to the "buy and hold" that expected for all. The TSP fund fact sheets show that administrative costs for TSP have fallen each of the past three years. For all of 2007 the costs were 1.5 basis points which is 0.015%, compared to 0.030% for 2006. The facts published in the reports are contrary to the FRTIB's campaign to reduce trading costs by restricting the frequent trade activity of those to choose to manage their TSP accounts based upon free enterprise and the rules established four years ago. Just who is the irresponsible party here, the FRTIB or those account holders who do not want "buy and hold". I condemn the FRIB for spending hundreds of thousands of dollars mailing letters to those who trade more than three times a month.
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48336
The use of the term "day trader" is totally wrong-headed when applied to what TSP participants do. True day traders make several moves during the day and are totally out by close of market. Due to TSP rules this is not possible for TSP participants. Even "frequent traders" as identified by the TSP Board rarely make more than 25 re-allocations of their accounts per year. The problem is that due to market volatility 10 or more of those re-allocations may need to occur in a relatively short window (30-60 day period).
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48334
The TSP board has become a dictating entity and is not looking out for the best interest of its participants. Is the issue daytrading or increased cost? If it's a combination of both then why have cost went down in 2007 for several funds. Also, why does the board need to adjust the L-Funds on a daily basis? Isn't daily balancing increasing the cost and initially buying and selling on a daily basis? I am confused by the board's actions and clarity of what they are trying to do. In addition, why does the board pick on several people who have traded their accounts and make them send their IFT through the mail? This is grade school antics. Enough! Give it a break TSP board. I have not been subjected to these grade school antics. But, I do move my account to maximize the best outcome for me. If the board is going to limit everyone to two transactions per month then do that. They do not have the right to continue to punish people for trying to make their accounts grow. This is America and a capitalistic society that we live in. Let it be that way.
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48332
I find it interesting that the TSP Board unilaterally suspended internet tranfers for over 500 fellow federal employees based on rules not even finalized yet. Who's running the board? If they can change the rules to whatever they want without regard, then none of us have any say in the matter. This isn't China.
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48331
The board's comment regarding how well the restrictions have worked are at best self serving....nobody watching these markets recently would have been making IFTs due to the extreme volitility. They would have bailed and stayed put in the G fund OR stayed in the market (at least it would be a personal preference). I know I would have, but I've been locked out for making 4 IFTs in February (one over the PROPOSED limit). Waiting 5+ days for a snail-mail transfer is not worth the risk and anxiety in markets like this as far as I'm concerned. I'm wondering how well this is working for our military folks in the Middle East who are on the restricted list?
I'm pretty sure my less than $150k nest egg has not been the reason for the alleged losses seen in the TSP (but then again, the TSP board can't seem to tell anyone exactly what their contribution to the phantom problem is). What we do know is that it cost less than $4.00 a YEAR in 2007 for every participant to have unlimited transfer capability (which was less then 2006)...I'd give up a couple of visits to Starbuck's to preserve that freedom.
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48330
I feel that the majority of participants would like to see the figures of how 3500 have affected all participants. What is the exact figure/fee on a trade. I know some of the 3500 have seen 26 percent gains in 2007. If you can give a example of how one trader made these kinds of gains and how much extra it cost the TSP etc. Keep it fair not just to make your jobs easier.
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48328
It's good to see the Federal Unions making public comment and taking a stand. Letters to 3700 participants and Mail Restrictions for 557 others is such a waste. If the issue was addressed on their website,if the Board used factual figures, if the sanctions imposed came after the Federal Registry Determination, If Mr. Long would answer his emails and faxes, If the paticipants had the opportunity to voice their opinions, THEN AND ONLY THEN, would the 3.9 million participants have proper representation.
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48322
The TSP board needs to remember that the TSP funds are our money, not the governments. As such it should be so our decision as to where and when we change funds. Giving an advantage to the G-fund is just like putting all of your money in company stock of the company you work for (not a wise decision and certainly not diversified). Presently the G-fund is paying less than the real inflation rate which does not protect our retirement funds from inflation. In these turbulent times we should be able to move our money as often as necessary to protect it. If they can show what it costs to move the funds they should charge us but there are private brokerages that change only $10 per trade.
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48318
Why did they even go through the motions of having a comment period? It wasn't well advertised (I was never solicited for comment.) It was obviously a fore-gone conclusion. Whether it was the right decisaion or not doesn't matter in this context. TSP management knows what's good for us and that's the end of it. To send a communication to the board one must use snail mail. The times I've sent comments I have never gotten even an acknowledgement. There's no competition for our participation so there's no incentive for them to treat us as other than children.
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48299
As a participant and someone who tracks my TSP fund regularly, I think limiting the number someone can transfer in a month very reasonable way to maintain cost. I do think limiting to 4 interfund transfers a month is very reasonable. For those who choose to perform transfers more often, I think they should pay the full amount instead of having all of us pay for their actions. I want my TSP to grow not have to pay for someone elses trading (gambling).
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48294
Who do I write to stop the Thrift Board in trying to rein in people trying to profit on swings in the market. Why shouldn't Federal Employees have the same ability to do what Wall Street traders do everyday. This is why people hit the rocks from Enron in that they could not move their money. It is like not being able to move your cash out of a bank when there is a run. With the economy weak this is not a good idea.
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48287
It might be helpful if the management at the TSP published articles in their newsletter that outlined the benefits of not engaging in speculative trading (i.e., trying to time the market) which is what the folks making frequent transfers seem to be doing. Too many folks buy into the hype generated by the Talking Heads who pose as experts on the Stock Market trading and jump on any "hot" stock these so-called experts tout.
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48284
I feel it is fair to allow only two "free" trades per month and assess a fee to those who make more than that instead of placing the burden on all contributors to the TSP. I also feel that the administrative fees charged on our individual accounts should be disclosed on our statements.
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48282
The real answer to this problem is to charge each account that make >3 transfer the expense for the additional trades. This way TSP guarantees the greatest flexibility while keeping overall costs down.
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48280
Again, the comments made in this article are disturbing. Federal employees never had a say on how TSP trading will work. TSP was being traded for us and then the council says, "OK employees your going to have to do to your own trading". Now they want to charge us a service percent to perform our own trading. "Get Real People"! Jacqueline Simon has the only "smart" idea in this entire article.
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