Thread: Managing a stock portfolio/managing TSP account

Even though commissions are much lower today than several years ago, commissions generated by trading in a private portfolio should be considered.

Also, if not in an IRA, short-term capital gains rates will have to be paid as compared to the smaller long-term cap gains on active accounts.

Do you think the future of TSP will have transaction fees for making IFT's?

Originally Posted by sugarandspice

Do you think the future of TSP will have transaction fees for making IFT's?

Shhhh, Garys watching.

I don't think so because I don't believe they (TSP) incur much more expenses when they move the money around. In other words if $100M is moved from G to C on a particular day, but $80M is moved from C to G then they have to pick up $20M S&P 500 that day. One big purchase no matter how many transfers were made.

This is just my theory because I don't really know exactly how it works but I know they have never really complained about the activity so it makes some sense.

The I fund is composed of 1021 companies and a buyer has absolutely no control over any of them. All you can do is go with the flow - how easy is that? You don't even have control over the infamous fair value (FV). But there is definitely a place in every portfolio for some international exposure. And a mutual fund is the easiest approach - but you have no flexibility. You are even limited on the amount of money you can contribute - so timing provides an opportunity to outperform the buy and hold DCA approach. The C fund is smaller and more concentrated therefore easier to judge its' performance characteristics.

Well they bitched about people using the loan program so they implemented a 50$ fee per loan saying that the same people were the ones using it over and over again. We already have fees taking out to cover the program so I totally disagree with the loan fee. It seems to me that a good % of people Who use IFT's regularly may reside right here at TSPTalk if the numbers were right from Causey's interview. So I guess we will know first if it happens.

If the general population gripes loud enough about fair play you can bet they will start restricting the time involved in making round trip IFTs. Everyone else in the mutual fund arena has instigated certain collars to rein in excessive IFTs. We've just been lucky so far not to attract attention, but I firmly believe some politician is looking at the topic and will take money to change the rules. That's simply what the rest of the mutual fund industry has voluntarily done to reduce expenses - the multi timer actually runs up expenses and reduces the gain from us buy and hold types - shame on you.

Originally Posted by sugarandspice

Well they bitched about people using the loan program so they implemented a 50$ fee per loan saying that the same people were the ones using it over and over again. We already have fees taking out to cover the program so I totally disagree with the loan fee. It seems to me that a good % of people Who use IFT's regularly may reside right here at TSPTalk if the numbers were right from Causey's interview. So I guess we will know first if it happens.

It probably will come down to whether the Lords Of TSP think they are performing a service by saving people from themselves.

-I'm sure that was the reason for the fee for loans...to stop people from taking loans!

-Why L funds? To save the masses from overly aggressive or overly conservative allocations.

-Why do they continue to limit investment options? Because they are afraid that more options means more mistakes.

If TSP transfers get out of control, I'd expect something to slow them down. (Fee per transfer....certain number per period of time....Something like that).

The good news is that it doesn't seem to be a problem yet, as you've noted. But if it gets out of hand, (by whatever definition they determine), watch out.