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Thread: Less than 1 Percent Option (read only)

  1. #37

    Join Date
    Apr 2008
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    Cleveland, Ohio
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    Default Re: <1%IFT Option

    "Originally Posted by WorkFE <1%IFT Guru's,
    Just out of curiosity. Is it not true that whether the market goes up or down is irrelevant. By rebalancing dailey to your initial numbers you win.
    Either you move small gains into the G or you replenish shares at a lower cost. Seems to me you don't have to put alot of thought into it. When you are out of IFT's.
    As a reminder if you did this yesterday you used an IFT, <1% or not.

    It is simplicity at its best.

    Actually it is not that simple. There are a few factors that affect your daily balance in both shares and dollars. I will try to put a much better explaination together either later tonight or over the weekend. I want to make sure the explaination makes sense. The one thing to remember is that everything takes place at COB that day. Your account balance, shares and percentages all take place and adjust at the end of the day and you are making a best guess before noon EST."


    I worked on a couple of scenarios of <1% vs Buy and Hold using the 2009 numbers through March. I started the 2009 investment year with $100,000.00 in all scenarios. I can post my worksheet if anyone would like to see my work in total. Now on the <1%, I already had the up and down days right in front of me so it made my choice much simpler than if I would have made up my mind before noon EST. However, I will say that you pretty much knew on a day to day basis how good or how bad the day was looking before noon.
    My <1% I started at 80,5,5,5,5 GFCSI. I maintained a steady 5% in the F fund (not a big fan of F). I used the G and F funds to purchase shares in the CS&I funds all the way through March. My first Buy & Hold I also used 80,5,5,5,5. My second Buy & Hold I used 30,35,35 CSI. My next three Buy & Holds where 100% C, S & I. Again I started out every January with $100,000.00. Remember the higher the percentages in each fund the greater the risk.

    I made a total of 31 IFT's January through March. In March 4 days could have gone either way.
    -----------------------------------------------------------------------
    Scenario #1 - <1% 80,5,5,5,5 $100,000.00 Starting shares per fund;

    G-6278.2029 F-399.4759 C-454.3302 S-400.1537 I-343.6851

    At the end of March the shares looked like this;

    G-3467.6553 F-384.1063 C-1685.9437 S-1437.1840 I-1386.2542

    A difference of; G-786.5365 F-14.2221 C-326.8606 S-270.2538 I-348.3617

    At the end of March the account was worth $97,424.41 for a loss of $2,575.59.
    -----------------------------------------------------------------------
    Scenario #2 Buy & Hold 80,5,5,5,5 GFCSI

    At the end of March the account was worth $98,371.36 for a loss of $1,628.64.
    -----------------------------------------------------------------------

    For scenarios 3, 4, 5 & 6 January and February where negative months and March ended positive.

    -----------------------------------------------------------------------
    Scenario #3 Buy & Hold 30,35,35 CSI

    At the end of March the account was worth $85,572.43 for a loss of $14,427.57.
    -----------------------------------------------------------------------
    Scenario #4 Buy & Hold 100 C

    At the end of March the account was worth $86,295.76 for a loss of $13,704.24.
    -----------------------------------------------------------------------
    Scenario #5 Buy & Hold 100 S

    At the end of March the account was worth $87,481.59 for a loss of $12,518.41.
    -----------------------------------------------------------------------
    Scenario #6 Buy & Hold 100 I

    At the end of March the account was worth $83,043.26 for a loss of $16,956.74.
    May the force be with us.

  2.  
  3. #38

    Join Date
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    Default Re: <1%IFT Option

    Quote Originally Posted by squalebear View Post
    Thanks Nasa for the Hard Work !
    From your post (as with Lady, I hope I got it right):

    I can't help but think that given enough time, when share prices ultimately
    reached their original January Price, the Buy & Hold (Scenario#2) would be
    left in the dust. Further, the "break even" point in dollars would come that
    much quicker because of the accumulation of more shares.
    Again it has to be mentioned that even using the <1% option increases RISK over staying in the G fund. But depending on how thick skinned you are it can also have it's rewards.
    I will add some more information to my spreadsheet that will show a daily profit/loss for all the scenarios and then post the spreadsheet. It may help.
    SB, Using the scenario #1 and #2 above you are correct. In a post below I mentioned how the scenario #1 improved by $3,370.89 (do to the increase of shares) the first three days in April. Scenario #2 over the first three days of April increased by about $800.00.
    I have to mention that if the first three days of April had been negative then scenario #1 would have lost more money compared to scenario #2 because of the higher fund percentages.
    May the force be with us.

  4.  
  5. #39

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    Default Re: Using <1%IFT Option within IFT trading limit

    Quote Originally Posted by Boghie View Post
    A question:

    Will the use of the '<1% IFT' technique count as one of the IFT trades toward the limit.

    That is, let us speculate that I have two IFT trades remaining but do not want to make a major allocation change. Namely, I want to keep my powder dry and move 3% into equities on a specific day or range of days.

    Can I use the '<1% IFT' technique for a number of transactions while keeping the big cahuna IFT transactions available?

    The <1% option counts as an IFT. If you had 2 IFT's for the month and did a <1% move that would count as one of your FRTIB sanctioned IFT's. Then you would be left with only one IFT for the month. For a better explaination on the IFT and the <1% option go to the last page in this account and read the first couple of posts.
    Any more questions do not hesitate to ask.
    May the force be with us.

  6.  
  7. #40

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    Default Re: <1%IFT Option

    Here is the spreadsheet that I used for the <1% and the Buy & Hold numbers. It was a large file so I had to break it down into smaller ones. Dang 244KB limit. Enjoy!!!
    May the force be with us.

  8.  
  9. #41

    Join Date
    Mar 2006
    Location
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    Smile <1%IFT Option - Bumpin' for the Newbies...

    Bumping this thread for the newbies...

    The definition and techniques behind using small unlimited IFTs are on page one of this thread. Thoughts follow.

    Here is one thought.

    Lets say you got scared yesterday - maybe you thought America was going to lose 1,000,000 jobs in July or something. You used your second IFT to run to safety - by the way, not stupid after October, November, and March. Now, you may miss on a major rally over the next few days.

    Well you are in luck. Your salary contributions gave you 0.02 holdings in the C, S, and I funds today. So now you can use SqualeBear's technique to bump them to 1% each. Then hope Monday bumps them to 1.x% so you can bring them up with another free IFT to 2%. Wash, Rinse, Repeat.

    If you mix in the L Funds you can reallocate a significant portion of your assets in small increments every day (3% - 5% every day).

    Enjoy...
    Lookin' up at the 'G Fund'!!!

  10.  
  11. #42

    Thumbs up Re: <1%IFT Option

    THE ANSWER IS YES YOU CAN MAKE A <1%IFT WHILE ALL PERCENTAGES ARE SHOWING xx.00% IN ALL FUNDS !

    First, know this ! It counts towards your 2 limit for the month.
    However, if you've used your 2 IFT's already then here's the breakdown.

    You must remember that the TSP determines "share price" at the end of
    the day, however, any IFT's will be calculated last / after the share price
    has been determined. Next, your IFT counts towards tomorrow's trading
    and must reflect the next days beginning share price.

    With that said;

    If your TSP Balance shows 50.00%(G) 25.00%(C) 25.00%(S) prior to noon on the day that you've decided to do a <1%IFT,,,,,,,,, then,,,,,,,,,

    You can enter the SAME PERCENTAGES into the IFT Request page prior
    to 12 noon. At the end of the day, the TSP will determine your gains and
    losses for that day. After they do, your percentages would have changed
    and would have been published the next day. However, you made a <1%IFT
    before noon. Having already changed your Balance to reflect the days
    change, the TSP will then adjust your balance to the percentages that
    you requested before noon.

    TO MAKE THIS EASIER TO UNDERSTAND, I'LL ATTEMPT TO DEMONSTRATE WHAT YOUR BALANCE WOULD LOOK LIKE AT EACH CHANGE.

    * BEGINNING BALANCE BEFORE NOON: (G)50.00% (C)25.00% (S)25.00
    * <1%IFT CHANGE ENTER BY NOON: (G)50% (C)25% (S)25%
    * THE DAYS TRADING LEFT YOU WITH: (G)49.95% (C)25.03% (S)25.02%
    * THE TSP DETERMINES YOU MADE A <1%IFT AND WON'T PUBLISH THE ABOVE PERCENTAGES.
    * THE TSP TAKE YOUR ENDING DOLLAR BALANCE AND ADJUSTS IT TO REFLECT YOUR IFT REQUEST.
    * THE TSP PUBLISHES YOUR NEW PERCENTAGES THE NEXT MORNING, THEY ARE;
    * (G)50% (C)25% (S)25%

    BY DOING A <1%IFT,,,, YOU FORCED THE TSP TO MOVE THE xx.02% and the xx.03% BACK INTO THE (G) FUND.

    NORM, YOU ALWAYS WELCOME TO CONTRIBUTE YOUR ANSWERS TO QUESTIONS POSED TO ME BY OTHERS.

  12.  
  13. #43

    Join Date
    Sep 2004
    Location
    Missouri
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    Default Re: Less than 1 Percent Option (read only)

    nasa1974
    The “<1% option” is just that an option that can be used by members of the TSP that want to stay proactive in their accounts. This is for members that do not believe that a “buy and hold” mentality is for them. This option creates RISK in your account and is not a safe haven from losses in the market. That is what the “G” fund is for.
    The <1% option can be used to make IFT’s (Inter Fund Transfers) after you have used your first 2 IFT’s. The <1% option is considered an IFT.

    All the posts below help explain how the <1% option works. Start with the first post and work your way up. Most of your questions should be answered.
    This is a read only thread. If you have any questions about this option you can always post on my account.



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