The Sandbox

[Viva_La_Migra]

I filled out the petition. Here are my comments:

The limits proposed by the FRTIB will have a negative impact on my retirement nest egg. Social Security may not be there when I am ready to retire, so now is the time to actively invest MY TSP funds to maximize MY retirement income. I need to be able to take advantage of market fluctuations to both protect MY hard earned money, and earn more as the market moves up.

Some people are advocating imposing a fee per interfund transfer. I am not necessarily opposed to this, but we need to look at the common practices, and more importantly the services provided, in the public market. For example, Scottrade charges $7.00 per trade with unlimited trading ability. This sounds reasonable, and it could work for us as well, but scottrade also provides real-time stock market research and news, and access to a personal stock broker. The TSP does not provide ANY of these services, so our trades should only cost us about a dollar or two per trade.

The excuses provided by the FRTIB for the restrictions are not valid. They only bring it up now, because the market is down and more people are getting proactive in managing their funds. They say they want to protect us from ourselves, but I say to them “Thank you for your concern, but I am a big boy now and I take full responsibility for my interfund transfers.”

I know I could have made better arguments, but this was all I cared to say at the moment. I'll have better arguments for my Congressman!

[pogo]

check this article out if you have the time,sort of long http://www.irrationalexuberance.com/ then click PDF Version it will gvie you a little insight on life cycle personnel accounts which i believe tsp board is leading us to.

[James48843]

Ok people-

There is another issue of the TSPSHAREHOLDER.ORG newsletter just about ready to go.

Anybody want to volunteer to get an advance copy, and help proof read before it gets distributed?

If so, send me a PM with your e-mail address, and I'll put you on the advance distribution list.

Looking for some folks who can help proof read, and see if anything sticks out at them, about a half hour before the nightly bulk-emailing.

Thanks for any volunteers who step up. Looking for perhaps five or ten people.

thanks- PM me your e-mail address if interested.

[Viva_La_Migra]

check this article out if you have the time,sort of long http://www.irrationalexuberance.com/ then click PDF Version it will gvie you a little insight on life cycle personnel accounts which i believe tsp board is leading us to.

Wow! He makes a good case against the lifecycle funds. His examples also seem to indicate that investors will buy and hold in one particular fund, and does not make allowances for people to move funds around. I wonder what he would think of our current situation with respect to interfund transfers?

[James48843]

Some highlights that will be in the next issue of TSPSHAREHOLDER.ORG:

I found another golden nugget in the attachments to the October 2007 Thrift Retirement Investmetn Board meeting minutes.

Listen to this:

I pulled up the connected October 5th memorandum from Greg Long to the Board members. On page 9 of that nice package of graphics and charts, is the best argument yet.

On page 9, in the right hand column, is the number of IFT trades conducted by Shareholders, month by month, since 12/31/2004.

Do you know how many trades were made in Janaury of 2006?

There were 205,166 trades executed.

Do you know how may trades were made in January of 2007?

There were 175,918 trades executed.

Year over year, the number of trades WENT DOWN, not up. On average, the overall numbers of trades is growing, but only slightly, on the order of less than 10% per year.

Here is a look at what the NUMBER of interfund transfers from January 206 to September 2007. The spikes are volatile months, nothing more.

Attachment 2821

I haven't added up the total numbers, but if you do a quarter by quarter looksie, it appears to be about equal. The spikes occur when the markets burp, nothing more.




The difference between costs for those years?
2006 trading costs were 16 million.
2007 trading costs were 26 milion.

For the same number of IFT trades, more or less. True, it went from about 175,000 a month, to about 190,000 a month. It's those 10,000 new people who have educated themselves and actually made a decision to make an IFT that drove the number of trades up about 10%. Hear that folks? THE NUMBER OF IFT TRADES EXECUTED HAS RISEN JUST 10% IN TWO YEARS.

So what DID change between 2006 and 2007 to drive the cost of exchanging shares from 16 million dollars, to 26 million dollars?

Simple:

Number of L fund holders:

January 2006: 245,922

January 2007: 452,990

September 2007: 543,213

[James48843]

So what DID change between 2006 and 2007 to drive the cost of exchanging shares from 16 million dollars, to about 26 million dollars?

Simple:

Number of L fund holders:

January 2006: 245,922

January 2007: 452,990

September 2007: 543,213

Attachment 2822

That's right folks. Remember, each one of those L fund holders gets his/her shares moved automatically, each and every day. If one underlying fund value goes up, and another one goes down, then, well, there is balancing to do every day, to match it up to the expected shares.

And THAT is what caused costs to rise. It is the daily rebalancing done for a half-million people.

[nnuut]

James this is another GREAT find. They are sure going to regret pissing you off!

[James48843]

And, since the market has been hot the last two years, the AMOUNT OF MONEY IN THE ACCOUNTS OF THOSE 543,213 people has gone higher as well.

Attachment 2823

See?

It's not the 3,000 moving more than twice a month who are causing costs to rise, it's the 543,213 L funders having their portfolios , moving EVERY DAY in the L fund rebalancing.

Tracy Ray's figures are only reflecting the number of people who are IFT'ing in and out of L funds. Its not showing the actual underlying costs of the G, F, C, S, and I that have to be adjusted EVERY DAY on those 543,213's accounts.

Which, by the way, is now over $22.8 BILLION DOLLARS, at the end of September, or an average of about $41,900 for each TSP L Fund account.

[James48843]

November Thirft Board meeting minutes are now posted over in the FTRIB electronic reading room.

Interesting stuff. It turns out that trading in the I fund in October actually MADE 56 basis points, becuase Barclays screwed with the Fair Value on the October trades.

In plain english, I FUND HOLDERS MADE 56 basis points ABOVE what the they would have in a buy-and-hold scenario, BECAUSE they made trades in October. If there had been no trading, it would have COST the TSP more.

TRADING IS PROFITABLE FOR BOTH THE TRADER, AND FOR THE ENTIRE TSP.


Tracey Ray, why didn't you tell the thrift board THAT? ? ?

[James48843]

New Newsletter is out at

http://tspshareholder.org/newsletters/Vol2_No1.html

[Viva_La_Migra]

Excellent newsletter! I am going to make a nice color copy of the newsletter and hand deliver it to a staffer at my Congressman's office, if not the Congressman directly!

[James48843]

P.S.-

We're looking for membes especially who work in the DC area, in order to hand-carry some things in the future to some offices and drop them off. Kind of like special "TSP Shareholder Ambassador" to do some legwork in and around D.C. No experience necessary. We'll guide you for everything you need to know.

If you are interested in helping be the "legs", we need your help.

Send me a PM, tell me where you are *(agency, and part of DC you are physically located in) and I'll add you to a special e-mail list to receive messages, and "asks".


We're looking forward to hearing from you.

Thanks