Thanks to a major transfusion of cash by the Federal Reserve Board to the credit market on Tuesday, the stock market made its biggest gains in 5 years.

Unfortunately the day before that, the news was that the stock market was at its lowest level in years.

Both reports were true. Such mixed message news makes it tough for investors who are looking for the perfect stock or mutual fund. An investment that is totally safe and yet offers a top dollar return. This is not an easy goal to attain. But people keep trying.

For example:

In January nervous/prudent (choose one) investors moved almost $6 billion out of the stock funds of their Thrift Savings Plan. They transferred $1.8 billion from the S &P 500 stock index C fund; $2.3 billion from the small-mid cap S fund and pulled $2.3 billion from the international stock index I fund.

Most of the money investors pulled out of the stock market went to the treasury securities G fund ($4.4 billion) or to the bond-indexed F fund which got a $1.3 billion infusion.

Federal and military investors also transferred $399 million out of the set-your-own-course automatic-pilot L (lifecycle) funds and put the money in the the G and F funds. February numbers will be available next week.

The majority of the 3.9 million TSP account holders didn’t do anything, or made only minor changes to their accounts. Many, especially those who are years away from cashing in their TSP chips, think stocks are on sale. Many financial planners do to, which is why they recommend that people invest for the long haul with a diversified portfolio. In fact, for rebalancing purposes, they recommend that people sell stocks or funds that are doing well to purchase those that are in the tank.

But some TSP investors believe they can do better by closely monitoring the market, and national and world events, and moving their investments around accordingly. The board that runs the TSP says there are between 2,000 and 3,000 so-called frequent traders, many of them upset about plans to limit TSP investors to two trades per month to hold down administrative costs.

Meantime, TSPSHAREHOLDER, a private group that favors the right to an unlimited number of trades, says data from the Federal Retirement Thrift Investment Board shows that the cost of interfund transfers had decreased, not increased, from 2006 to 2007.

Most major mutual funds – Vanguard, Janus, AIM, etc. – have trade limits. They range from one per month (Royce) to four per year (AIM Funds).

Nearly Useless Factoid

A follow up: After we mentioned earlier this month that a group of jellyfish is called a “smack,” Stanley from the VA offered a list of collective nouns from the medical profession (with tongue firmly planted in cheek):

An acher of bacteriologists
A murmur of cardiologists
A stain of cytotechnologists
A rash of dermatologists
A speck of forensic pathologists
A vessel of heart surgeons
A clot of hematologists
A nursery of obstetricians
A dose of pharmacists
A pile of proctologists
A stream of urologists

To reach me: mcausey@federalnewsradio.com

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