I Fund

[missile]

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I just recently got back from Europe ski trip. Spent 3 days in germany and 7 days in Italy. Almost every european that I talked with in banks, airports money exchanges and european friends that work in the financial world all agreed the Euro would be around 1.55 by year end and maybe higher. Although I did convert some travelers checks and dollars to euro, besides the credit card. I found the rate to be in most places 1.41. Based on the theory behind the I fund, this would probably indicate a steady increase. anyone got any ideas on this.

 

[Guest]

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missile wrote:

I just recently got back from Europe ski trip. Spent 3 days in germany and 7 days in Italy. Almost every european that I talked with in banks, airports money exchanges and european friends that work in the financial world all agreed the Euro would be around 1.55 by year end and maybe higher. Although I did convert some travelers checks and dollars to euro, besides the credit card. I found the rate to be in most places 1.41. Based on the theory behind the I fund, this would probably indicate a steady increase. anyone got any ideas on this.

Officially, the current rate today is about $1.31 (i.e. 1 euro = $1.31). The fact that all agree doesn't make it true. However, IMHO, the current economic situation lends itself to such a scenario long-term. That being said, the dollar is currently strengthening short-term, and should continue to do so for at least a few more weeks.

 

[missile]

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Thanks for the reply, I didn't check my figures before transmitting, the rate should have been $1.31 to the Euro. I also think that short vs long term is relative. Thanks Ron

 

[Paul]

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Here's an article that may shed some light on the long term.

 

[Guest]

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My guess is thatthe USD index is about one thirdinto its up cycle. I expect it to strengthen to about 87-88. (or6% above its current rate) The dollar is already up 3% YTD, so this entire short-term bounce should be worth about 9-10%.At that point, it should start another slow decline unless significant measures are taken to curbthe deficit.

 

[Ragin Cajun]

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So Sarah, or is it Sara,

Anyway, so you still think the $ is up in the short term, therefore making the I fund a risky play for a while?

Rajun Cajun

 

[Guest]

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rajun cajun wrote:

So Sarah, or is it Sara,

Anyway, so you still think the $ is up in the short term, therefore making the I fund a risky play for a while?

Rajun Cajun

Well, it's not that simple.Two points to consider, IMHO.

First, yes...the USD is pointing up short term, which makes the I fund a more difficult play. You are "sailing against the wind" with respect to the dollar.

That said, the international marketsHAVE BEEN performing better than the US markets thus far this year (as of this morning, the EAFE was flat for the year and the S&P500 was down about 4%), which makes the I fund a better choice if thedollar isn't a consideration.

So, IF the international marketscontinue to show significantly better returns than the US markets (i.e. that the return on the EAFE > the return on S&P500), despite the dollar gains, then I'll begin tomove a bit more intothe I fund.

Sarah

 

[Mike]

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The projected deficits for the US weighed very heavily on currency markets today, and will likely continue weighing on them until Bush delivers the State of the Union address. He'll probably propose a budget that puts the brakes on spending (how he'll do that in light of his social security reform plan and the Iraq/Afghanistan spendingis beyond me) and cuts the deficit... but will the markets listen?

Currency traders have basically ignored his "strong dollar policy" proclamations, so they could very well ignore this as well. Anyone can propose spending cuts, but getting them through a pork-happy Congress is another matter entirely - even a Congress controlled by the same party.

If anyone spots any articles on how the currency markets are likely to react, please post them. I think we're in uncharted waters here, since I don't ever recall a president proposing cutting spending (the past approach has been to propose dozens of new programs, in fact).

 

[tostige]

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The I fund can be somewhat tracked during the trading day by the symbol ^efv on Yahoo, some other places it's just efv with no ^ before the EFV. The I fund is more dependant on the pound and yen than the Euro. You can get realtime quotes @ forex-markets.com; click on quotes. If the dollar is weaker than the yen and euro and the overseas markets are up you can be somewhat sure the I fund will do good that day. I check the overseas markets (Britain and Japan) by going to Rueters.com, click investing, scroll down to world markets, click on more. I usually do this in the morning as those markets have already been open for several hours already. A little more work to be successful trading the I fund, but it's worth it.

 

[sonofthunder]

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About a week ago I caught part of an interview on NBR, some comments by a man named Drach from the Drach weekly report. First I was impressed with his beating the S&P by a pretty good amount last year with his picks which gained over 13% in 2004, of which I am assuming by the interview that these picks were posted at the beginning of 2004 on NBR. You can find the interview on the NBR website.

His advice was to stay away from our markets until we see about a 10% drop from the closeout of the 2004 market price.I do not recall what that was, but I believe that it was close to if not over 1200. I must admit I was very impressed by his record and I think that a persons advicewith that kind of record is worth heeding.

Now my question is, if this plays out like he believes it will, how do yall think this will affect the I Fund? and the F Fund?

Mr.Drach said that for now he was going with General Electric, which just went up a bit, and Dollar General, as well as Paycheck (PAYX) as bargin buys. Wish I had some extra $ to try his buys. If you whoare in the $try these, let me know how you fare. Anyway for what it maybe worth $,$$$.$$$.00 ?,???.???.00 there it is.

 

[Guest]

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sonofthunder wrote:

... I was impressed with his beating the S&P by a pretty good amount last year with his picks which gained over 13% in 2004...

C fund was up 11% last year. S fund was up 18% last year. I fund was up 20% last year.

I was up 20% last year in TSP. No brag..just fact.

I would recommend that you check his past performance over a longer period before following his recommendations.