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Thread: Flalaw97's Account Talk

  1. #13

    Default Re: Flalaw97's Account Talk

    So, I am thinking that as TSP particpants we have three things that make us significantly different than others who engage in market timing. I am trying to evaluate strategies in those parameters. 1. Only two IFTs per month (after that only moves to G) 2. IFT must be submitted before noon and 3. IFTs are free.

    With respect to number 2. I see most people wait until around 1130 or so to initiate their IFT. I assume that is to wait until the last minute to see where the market is headed. So I am trying to figure out if there are principals that will help indicate where the market will close based on what it did before 1130.

    With respect to number 3. There is no cost reason not to use all of your allotted IFTs, the drawback is once you have used your 2 IFTs, you can no longer increase your position in the market, only back out. But since it resets each month, is it best to develop a strategy to maximize returns/minimize risk on a monthly basis (rather than holding a position over a month). In theory, if you haven't used your second IFT in a given month and you think the market will drop on the last day of the month, you could sell all and buy your same position back in on the first day at the lower price right?

    Just things that are going through my head right now.

  2.  
  3. #14

    Default Re: Flalaw97's Account Talk

    Quote Originally Posted by flalaw97 View Post
    In theory, if you haven't used your second IFT in a given month and you think the market will drop on the last day of the month, you could sell all and buy your same position back in on the first day at the lower price right?
    Actually you can do this even if you have used all of your IFTs. It's if you think the market is going to go up that you would use your last IFT to buy in and then you could sell to return to your position the next month. However that would use one of your IFTs for the next month. I don't know - there is something in here, obviously tied to ability to predict a single day up or down, in advance...

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  5. #15

    Join Date
    Apr 2008
    Location
    Cleveland, Ohio
    Posts
    10,254

    Default Re: Flalaw97's Account Talk

    Quote Originally Posted by flalaw97 View Post
    So, I am thinking that as TSP particpants we have three things that make us significantly different than others who engage in market timing. I am trying to evaluate strategies in those parameters. 1. Only two IFTs per month (after that only moves to G) 2. IFT must be submitted before noon and 3. IFTs are free.

    With respect to number 2. I see most people wait until around 1130 or so to initiate their IFT. I assume that is to wait until the last minute to see where the market is headed. So I am trying to figure out if there are principals that will help indicate where the market will close based on what it did before 1130.

    With respect to number 3. There is no cost reason not to use all of your allotted IFTs, the drawback is once you have used your 2 IFTs, you can no longer increase your position in the market, only back out. But since it resets each month, is it best to develop a strategy to maximize returns/minimize risk on a monthly basis (rather than holding a position over a month). In theory, if you haven't used your second IFT in a given month and you think the market will drop on the last day of the month, you could sell all and buy your same position back in on the first day at the lower price right?

    Just things that are going through my head right now.
    Our IFT's are not free. There is a fee involved every time a transaction is made. We just don't see it. Back in the day we we could make an IFT daily. However, the board reduced it to 2 IFT's a month using the excuse that those of us that were doing IFT's daily was costing all of the TSP folks higher fees. So the many were paying for the few.
    May the force be with us.

  6.  
  7. #16

    Default Re: Flalaw97's Account Talk

    You are speaking in the collective right? I know that the cost of our IFTs are built in, but there is no loss in my portfolio if I make an IFT correct? In other words, the "cost" of my IFTs are born by everyone who is invested in TSP - hence the restriction of 2 IFTs - those who were making multiple IFTs per month were costing others disproportionately. Doesn't change the fact that if I don't make any IFTs, I am being charged for the collective cost of all TSP IFTs.

  8.  
  9. #17

    Join Date
    Apr 2008
    Location
    Cleveland, Ohio
    Posts
    10,254

    Default Re: Flalaw97's Account Talk

    Quote Originally Posted by flalaw97 View Post
    You are speaking in the collective right? I know that the cost of our IFTs are built in, but there is no loss in my portfolio if I make an IFT correct? In other words, the "cost" of my IFTs are born by everyone who is invested in TSP - hence the restriction of 2 IFTs - those who were making multiple IFTs per month were costing others disproportionately. Doesn't change the fact that if I don't make any IFTs, I am being charged for the collective cost of all TSP IFTs.
    It's a collective cost. You do not see it in your portfolio but it does affect the fund final cost. The added cost of the fees was an excuse to reduce our IFT's. There is more to it than that but I'm not going to go there.
    May the force be with us.

  10.  
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