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Frequently Asked Questions For
TSPAdvisor.com
1.
How are TSP Advisor
Predictions developed?
TSP Advisor monitors daily TSP share price movements to determine which
are technically significant. Predictions for which TSP fund will have a positive return on
investment (ROI) in the future are made and provided to subscribers by TSP
Advisor Alert Email. TSP Advisor predictions
are developed as output of a proprietary TSP prediction process, and the percentage of your
personal TSP account value proposed to be invested in each prediction is
determined by TSP Advisor using the TSP Funding Allocation Strategy. A brief description of the
TSP Prediction
Process and TSP Funding Allocation Strategy is as follows:
a)
TSP Prediction Process:
The TSP Prediction Process input data is taken from a large number of
specially selected US
domestic and international market indicators. TSP Advisor monitors daily TSP
share price movements. When significant TSP fund share prices movements
are noted and technically confirmed, current market data is evaluated using technical
analysis methods specifically designed and customized for the four variable TSP
funds (F, C, S and I Funds). Process output is generated in the
form of an investment signal for each variable TSP Fund. The TSP Advisor
predicts a TSP variable fund to have a positive short term ROI % when a strong
investment signal is
generated, but does not predict when weak or mixed investment
signals are generated. Immediately after posting each new predictions in
the Latest TSP Predictions table, Table A of the TSPAdvisor.com Subscription page, TSP Advisor
prepares and sends subscribers a TSP Advisor Alert
Email notifying them of the new opportunities and proposing applicable TSP Fund
buy/sell transactions necessary for capturing the new opportunities. Predictions are
considered to be valid until specifically changed by a future TSP Advisor Alert Email.
b)
TSP Funding Allocation Strategy:
The TSP Funding Allocation Strategy is defined as follows:
1) When only one variable fund is predicted to have a positive ROI in the
near future, 100% of account funds are recommended to be placed in the predicted
fund;
2) If two or more variable stock funds are predicted to be positive at the same
time, a percentage of your TSP account fund is recommended to be invested
in each predicted stock fund. Percentages are calculated using proprietary
moving average formulas.
3) The Bond Fund is only funded when it is the only variable TSP fund predicted,
in which case it is funded 100%. If the Bond fund is predicted at
the same time other TSP stock fund(s) are predicted, the Bond fund prediction is
ignored and not funded;.
4) When neither the Bond or any stock fund is predicted, a
high market risk period is indicated and 100% of your TSP account funds is
recommended to be placed in the
Government Securities (G) Fund to preserve your TSP investment capital during these periods.
TSP Advisor provided funding allocation percentages are posted on
the TSP Advisor Secure Subscription page and are contained in each TSP Advisor
Alert Email.
c)
Use Of TSP Advisor Funding Allocation Strategy is voluntary. Subscribers may
choose to use the TSP Advisor provided Funding Allocation strategy, a multiple of it or
they may choose to use their own personal funding strategy for
determining the amount of their TSP account funds to put in each TSP Advisor prediction they select for
implementation.
2.
How accurate are the TSP
predictions?
Prediction Accuracy is defined as
the percentage of the number of months or quaraters which had correct TSP Fund predictions
made in the period divided by the total number of months/quarters in the period.
TSP Advisor predictions were found to be highly accurate during the TSP
Advisor "Proof Of Concept" (POC) test. Using monthly market data taken
in an 18 month period beginning 1 May 2001 and ending on 31 October 2002, a
total of 18 variable TSP Funds were predicted to have a positive return on
investment (ROI) and all 18 predicted funds had a positive ROI value for the
following month. This provided a 100% prediction accuracy for the POC test
period. Based on an evaluation of the POC test results, we conclude that
our prediction process will provide accurate results for the great majority of
predictions made; however, this doesn't mean an occasional incorrect prediction
will not be experienced. Since we can't completely eliminate investment
risk, we expect a few incorrect predictions will be made on rare occasions.
Current and historical TSP Advisor Prediction Accuracy values are posted
on TSPAdvisor.com. To review
TSP Advisor prediction data, hit this link Prediction Data.
3.
What Return On Investment (ROI)
did TSP Advisor earn, and how does it
compare to ROI values achieved by other TSP Fund investment scenarios?
TSP Advisor predictions were
initially tested in an 18 month Proof Of Concept (POC) test that began 1 May
2002 and ran through 31 October 2002. The intent of the test was to prove
that full implementation of all TSP Advisor predictions would be profitable.
The test simulated full implementation of all TSP investments made during each
month in the test period. A total of 18 predictions of variable TSP Funds
(F, C, S, and I Funds) were made during the test period, resulting in a
TSP Advisor cumulative return on investment (ROI) value of 32.7% being achieved.
The TSP Advisor (ROI) values
achieved during the POC test period were compared to ROI values achieved in the
same test period by other typical TSP investment scenarios. TSP Advisor Investment Portfolio returns
was benchmarked against those achieved by
5 other typical TSP investment scenarios, with each typical scenario consisting of a
100% investment in one TSP fund for each of the 5 TSP funds. The TSP
Advisor Investment Portfolio achieved a cumulative ROI value of 32.7%, which was
significantly higher than any of the other TSP fund scenarios, and was more than
double the nest highest scenario cumulative ROI value, which was the Bond (F)
fund that achieved a cumulative ROI of 14.16% during the same 18month period.
To view the POC test data and more current quarterly ROI data, hit this link TSP Investment Alternatives’ ROI Data.
4.
Will Use of TSP Advisor
predictions improve my TSP earnings?
Past financial successes don't
guarantee future ones; however, TSP Advisor's test results confirm that
timely full implementation of TSP Advisor predictions puts the odds in
your favor for making more profitable TSP investment decisions, which over time
will optimize your long term TSP investment earnings.
No one can predict exactly how high
your ROI value will be if you fully implement all TSP Advisor predictions
in a timely manner for a given period of time; however, you can make a pretty
good judgment based on a comparison of your personal TSP account calendar year
2003 cumulative ROI value to that earned by the TSP Advisor Investment
Portfolio, which was 16.1% for calendar year 2003. If your personal
ROI value was significantly lower than 16.1%, it is highly probable TSP
Advisor can help increase your TSP earnings.
While making higher returns in an up
market constitutes a portion of good investment risk management, another important part of good
investment risk
management is the preservation of investment capital when the market goes
down significantly, as was the case in the POC test period. The
POC test period consisted of an 18 month test period which began on 1 may 2001 and ended on 31
October 2002, a time frame that included several
"dot.com bubble burst" months and nearly 2 months following the day our
national 9/11 tragedies occurred. Both of these events caused market
prices to drop significantly for several months. During this period TSP
Advisor achieved a cumulative return on investment of 32.7 %, which was
significantly higher than that earned by any other TSP investment scenario in
the same period.
5. How can I
determine if paying the TSPAdvisor.com subscription fee is cost effective?
TSP Advisor has 3 subscription
rates, $13 monthly, $35 quarterly and $120 annually. The subscription rate
offering the best value is the annual rate of $120 per year, which averages $10
per month. The best way to evaluate your potential cost effectiveness is to
calculate your potential benefit cost ratio (B/C). Your benefit is the
amount of additional profit you would have made if you had fully implemented all TSP
Advisor predictions in 2003 and the cost would have been your annual
subscription rate of $120. You calculate your B/C as follows:
(Bo * 1.161) - B1
B/C
=
_____________________
$120
Where
B/C = Your Benefit cost ratio
Bo = Your actual 12/31/2002 TSP Account Balance
B1 = Your actual 12/31/2003 TSP account balance
For example, if you had a 12/31/2002
actual TSP account balance of $30,000 and you actually invested 100% of your TSP
account funds in the Government Securities (G) Fund, you would have received a
4.11% annual return and your 12/31/2003 actual TSP account balance would have been
$31,233. If you had made your TSP investments by fully implementing all
TSP Advisor predictions in 2003, you would have received a 16.1% return and your
TSP account balance on 12/31/2003 would have been $34,830. Your net annual
profit gain would be ($34,830-$31,233) or $ 3,597. Your B/C would equal
your net annual profit gain ( $3,597) divided by your annual cost ($120) which
is approximately equal to 30. Your B/C ratio of 30 represents a net gain
of $30 for every dollar of subscription cost you paid; thus, it is easy to see
that subscribing to TSP Advisor can be very cost effective.
6.
How does one get started
using TSP Advisor?
You
must have Internet access capability and become a subscriber to
TSPAdvisor.com before you will be able to implement TSP Advisor
investment predictions. Once these initial actions are completed, you will be able to evaluate TSP Advisor predictions that are
offered for your investment consideration, and select those you desire to
implement, after checking with your personal financial advisor. You implement selected
predictions by making online (tsp.gov)
interfund transfers in your personal TSP account. Each month, you repeat the
same procedure. For more detailed instructions for how to start using
TSPAdvisor.com, hit this link Getting Started Using TSPAdvisor.com.
7.
What are the
TSPAdvisor.com subscription rates, and how do I subscribe?
To
view the TSPAdvisor.com subscription rates and terms, hit this link
Subscription Rates And Terms.
For instructions on how to subscribe to TSPAdvisor.com, hit this link
How To Subscribe.
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