What Is A TSP Scam

Thrift Savings Plan Scam

I wanted to take a quick moment to address an issue that has been brought to my attention. Our service was unknowingly but gratefully featured on FedSmith earlier this month in an article titled “Commercial Financial Advice on TSP Investing.” We received a tremendous amount of interest from this article but also some negative assumptions about our service that I wanted to address.

What Does A Thrift Savings Plan Scam Look Like?

I’ve often wondered what a TSP Scam would look like so I decided to conduct a little research and what I found was absolutely astonishing.

Wayne McLeod masterminded a Ponzi Scheme targeting federal law enforcement agents and employees across the United States that would end up totaling $34 million. He spoke at seminars sponsored by the U.S. Government and persuaded investors to rollover their TSP Portfolios into his “Government Bond Fund” which never even existed. He was able to do this because he created presentations filled with charts, graphs, and promises of large consistent returns over time. Not to mention agencies such as the DEA and CBP paid him tens of thousands of dollars to present these investment seminars. It is because of this that a lot of the employees considered him to be “vetted”.

This individual was literally welcomed into the doors of federal buildings to promote his product! I cannot tell you the number of times we have been turned away when trying to promote our service. Some people cannot get over the fact that I am not a financial advisor or contradict the conventional buy & hold theory, but we believe integrity, character, and knowledge trump any title someone can earn by taking a 2 hour test.

That is not meant to discredit the Financial Advisor designation because there are indeed great advisors out there and they do a superb job. We simply believe that nobody is going to care more about your money than you. It is because of this reason we have built and designed our entire service around educating our subscribers and ultimately putting the decision in their hands. If a subscriber no longer agrees with our newsletter, finds our information non-beneficial, or anything else for that matter they can cancel their subscription at anytime no questions asked. I honestly cannot think of a better offer or business proposition. Not to mention the cost of our service is the equivalent of a movie ticket, while most advisors charge approximately 1% a year to manage your portfolio.

TSP Investing Does Not Promote Swing Trading

In the article one individual commented saying:

Being a business major and somewhat astute on investment theory and the financial markets, I find it hard to believe that you are recommending (promoting) these sites to federal and military members as a way to manage their TSP retirement accounts. It is well known that the Thrift Savings Plan is the most cost efficient plan out there. Recommending these fee based sites defeats the purpose of the Thrift’s second to none lowest in industry administrative costs. This is counterintuitive and in my opinion not very sound advice. Not to mention, one of the sites you mentioned (TSP Investing) promotes moving in and out of funds, or swing trading. Again, one of the primary reasons the Thrift board placed a limit on reallocating between funds to twice a month. With all due respect, you’re not a financial advisor (self-admitted), and I believe you’re off base and outside your realm of expertise when making these recommendations/suggestions.

Only our 300+ subscribers truly know how we operate our newsletter and I will not betray our paying members by revealing information they have paid for. However, I can tell you with absolute certainty that this is not a swing trading service, in fact we specifically address how to manage your emotions in regards to investing in almost every newsletter. Furthermore our system was designed so subscribers would only have to read our newsletter once a month. That’s twelves times a year you will spend ten minutes reading a newsletter, I honestly do not know any other method that has such a diligent hands off approach.

TSP Investing Does Not Time The Market

Another individual wrote:

I’m not a finance major, but I consider myself fairly well-read, and I think Fedsmith is doing a horrible disservice to its readers in publishing this. I’ve seen numerous academic studies that show that market-timing simply does not work, which is what it seems most of these services appear to be promoting. Just look at this Sep./Oct. where the S&P500 dropped from 2011 to 1862 points. More than likely, most of these “services” would have had folks selling stocks and moving into the G fund. Where is the S&P500 today? 2073. So basically these services would have had folks selling low and buying back in high. Not good. The best bet for a fed investor with a long time horizon would be to simply pick an asset allocation based on their risk comfort, desired international/U.S. split, set it, and forget it. This article could have stopped after the L funds, b/c that’s the only thing of value mentioned here. But hey, if people want to waste their money, go for it. I just don’t see any value in FedSmith publishing this, other than to give bad ideas to people. If readers want to get smart though, I’d suggest reading up at Bogleheads.org on that site’s wiki page and on the forum–some of the folks who post on that board are super smart, and I’ll bet nearly all of them would agree that a buy and hold strategy is the smartest path.

WOW! Talk about making huge assumptions! This individual was right about one thing, timing the market consistently over time is literally impossible. I have had to make this clarification numerous times with some of our subscribers. We do not time the market, we simply react to what the market is doing. We cannot accurately identify the peak of a bull market or identify the exact bottom of bear market. Our system is designed to focus on capturing 70-80% of market movements. We found this to be the most accurate and reliable method over time versus trying to accurately “time the market.”

As a professional I can only provide you information. I honestly believe we have presented a great case that directly contradicts the conventional wisdom of buy and hold. We presented it in detail in our video Maximize TSP Returns which can be found on our home page as well so we won’t go into a lot of detail here. But very quickly, if you’re still having trouble disregarding the conventional buy and hold theory/philosophy just answer this simple question. Why in the world would you keep your money invested in a market that was falling 25%, 35%, 45% when you could simply put that money to the side and wait for the market to recover?

What Our Service Does Offer

The main purpose of this newsletter is to not only give financial guidance but educate TSP members on issues and questions they cannot get the answers to anywhere else. We have developed a system that will maximize your TSP returns over time compared to the conventional buy and hold theory. We pride ourselves on knowledge, integrity, and character. While we believe nobody will truly care more about your money than you yourself, we are doing everything we can to provide you with the education you need to do so.

Our TSP Investing Strategy is the best one available and we offer it to anyone with a 30 day money back guarantee. If at the end of 30 days you feel it is not for you, simply cancel (no questions asked) and we can part as friends. Sign up today and get started securing your financial future!


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