TSP interfund transfers down when compared to last year

By Dorothy Ramienski
Internet Editor
FederalNewsRadio

TSP interfund transfers have decreased from this time last year.

This, however, has nothing to do with the action on Wall Street, good or bad.

On Tuesday’s Daily Debrief, hosts Christopher Dorobek and Amy Morris spoke with Tom Trabucco of the TSP, who explains what happened.

Trabucco says 167,000 interfund transfers occurred during the month of September, compared to the same time last year, when about 201,000 occurred.

This is because of the new rule limiting interfund transfers.

So, we don’t have that 4,000 to 5,000 number of frequent traders who are in there every day. Now I will point out, as well, that the limits we put on interfund transfers do not restrict anybody from putting more money in the G fund however many times they want to during the coarse of a month. They can do it every day if they want to continue to reduce their exposure to stocks by putting more of their funds in the G fund.

This, however, isn’t happening on as large a scale as one might think.

On Tuesday, the Dow Jones industrial average fluctuated up and down before closing at 9,310. This a day after the biggest point gain in history.

In addition, the same day saw the S&P drop 5 points to 998 and the Nasdaq fall 65 points to 1,779.

Trabucco says, it’s been a long time since investors have seen such up and down movement.

I think 1987 was pretty close because that was, I think, about 24 percent in one day. . . . I recall it clearly because I started getting calls from the press — we had just started up in April 1987 — [so people were] calling to find out what the activity was and during our first year we only had the G fund. So I was able to tell them we hadn’t lost a nickel that day.

        Read more: All News

Unfortunately, Trabucco says he’s no longer got the ability to say that. The TSP has expanded since its inception with the addition of the C,S, I and F funds, in addition to the L funds.

It has not been a good few weeks. Indeed, it’s not been a good year for the stock market. We have had an increase in volume of calls — people requesting their PIN’s and passwords to go in — people who normally don’t take a look who want to take a look.

Trabucco says, while its perfectly okay for TSP participants to look, he personally doesn’t like to examine his account on days like Tuesday.

It’s not the dollars today that count. Unlike some of these self-help books that are out there that are saying, “Live in the moment,” that’s not the case with your long-term retirement. What you want to be doing is thinking about the future and investing long-haul. Nevertheless, if you want to make a change, that’s fine and we can accommodate you.

Trabucco says the L funds are also fairly safe.

The G fund, of course, never has a bad day. The return thus far this year is 2.86. Our F fund — the fixed income fund — the return is just positive: .84 — a little less than one percent. But the three stock funds — the C, S, and I — are down respectively: 19.25, 16.08, and . . . 27.81. These are big losses for a year. Had you gone into the age-appropriate L fund . . . Even with having your exposure to stocks, your losses would have been -.206. That’s the return thus far this year on the L income fund. [on] the 2010 fund, the losses are 5.45. 2020 — 12.07 [and] 2030 — 14.67. 2040 — 17 — losses to be sure . . . but largely mitigated from those dramatic losses in each of the [other] funds.

The TSP will have more complete and accurate numbers after their Board Meeting next week.

As always, you can check your TSP Ticker daily by going to FederalNewsRadio’s homepage.

—
On the Web:

TSP – Web site

(Copyright 2008 by FederalNewsRadio.com. All Rights Reserved.)

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.