GrowMyTSP.com is, first and foremost, an educational site. Our goal is to teach the fundamentals of technical analysis and pattern recognition, applied specifically to the TSP funds. Utilizing these tools, subscribers to the site can make informed decisions when managing their individual TSP accounts, within the context of their PERSONAL RISK TOLERANCE. In addition, subscribers are provided insight into the real-time thinking and reallocation decisions of the author. Subscribers receive an Alert, via email and text, BEFORE I reallocate funds within my personal TSP account.
The Thrift Savings Plan (TSP) places 2 important restrictions on TSP account holders with respect to reallocations. First, any reallocation request must be made before 12:00 PM East Coast Time to get that day’s closing price. Second, account holders can make 2 reallocations per calendar month in any way they choose. Any additional reallocation can only increase holdings in the G fund. Both of these rules are significantly restrictive but, they are the rules of the game for TSP account holders. With respect to Alerts issued by GrowMyTSP.com, the first rule is extremely important to understand.
As stated above, we post, email and text an Alert to subscribers BEFORE I make a reallocation within my personal TSP account. I make reallocation decisions based on my view of the market, utilizing technical analysis tools, with respect to MY PERSONAL RISK TOLLERANCE. Individual subscribers are free to follow along with me or use the Alert to validate their own reallocation decisions with respect to their personal risk tolerance.
Because of the first TSP restriction described above, there are 2 decision making times available to make reallocation decisions:
The first is after the close of the stock market, at 4:00PM East Coast Time, each business day. This is ideal because I have until 12:00PM the next business day to examine the market and make any reallocation decisions. When a closing price triggers a decision to make a reallocation, I will generally post, email, and text the Alert to subscribers that night. In this scenario, I am NOT taking into account what happens when the market opens the following day. I have made my decision based on the closing price of the current day.
The second, and much more difficult, decision making scenario is based on a significant and/or unexpected change in price after the market opens at 9:30AM East Coast Time. If the market opens significantly higher or lower at the open, generating a potential reallocation decision, I have 2.5 hours to do all the necessary analysis, publish the Alert, and make my reallocation by 12:00PM to get that day’s closing price. The first hour of trading on any given day can be extremely erratic. On days when the market gaps up/down at the open, the first hour of trading often moves drastically in both directions before settling down. For this reason, the first hour of trading is ignored in terms of TSP reallocation decision making. This leaves 1.5 hours to do the analysis and make a final decision, then craft, post, email, and text the Alert.
Fortunately, Alerts issued based on a significant price move after the market opens are rare. In most of these instances, we can anticipate that possibility the night before and have the Alert ready, if a big price move happens at the open. On occasion, as happened on 04 November 2020, a significant price increase is not anticipated. On these very rare occasions, the analysis, decision making, drafting, post, email and text of the Alert, take us very close to the 12:00PM cut off dictated by the TSP. This is beyond our control.
On these occasions I have 2 options. I can either post and send the Alert, even if close to the 12:00PM cut off, or wait and get the following day’s closing price. My commitment is to post and send the Alert immediately upon making a reallocation decision; regardless of the 12:00PM cut off. Some subscribers to the site will be challenged by the time constraint. Some subscribers will not get the text or email until after the 12:00PM cut off. This is understandably EXTREMELY frustrating! While we do everything we possibly can to publish Alerts as early in the day as possible, we cannot guarantee that subscribers will get the Alert with sufficient time to act on the information by 12:00PM that day.
The TSP is a wealth building vehicle, not a day trading platform. The day that reallocations are executed is certainly important but, what’s most important is the big picture. Being in the stock funds when the market is trending up and in the G fund, managing downside risk, when the market is trending down.
Please post questions to comments…