Playing the I fund

[JOVARN]

Shortly before the market opened, Japan's Cabinet Office announced that the world's second-largest economy grew at a 0.8 percent annual rate during the April-June quarter, in its sixth straight quarter of expansion.

On a quarterly basis, the gross domestic product grew by a weaker-than-expected 0.2 percent from the previous quarter.

Japan's economy has shown signs of revival in recent years after a decade of stagnation.

In the past, the nation has relied mostly on exports, especially to the United States, to keep growth going, but in recent quarters consumers and companies have been spending and bolstering growth.

http://thestar.com.my/news/story.asp?file=/2006/8/11/apworld/20060811150723&sec=apworld

 

[airlift]

Yesterday I was following this information trying to assess its impact on the EAFE and the I-fund. Apparently, the fact that the Japan GDP came weaker than expected, coupled with the Middle East war and the terrorist plot, were responsible for a stronger dollar. The stronger dollar as a safe haven currency in uncertain times, and Japan, because if the Japanese GDP were to keep coming in weaker than expected, the BOJ probably would not raise Japan rates as expected; and, therefore, this expectation of a weaker YEN in relation to the dollar would impact the I-fund negatively because the I-fund does not benefit from a stronger dollar. However, yesterday, in relative terms, the EURO did not drop much in relation to the dollar (before Europe closed the markets). Maybe this helped to offset what I thought was going to be a whipping, that is, a much greater loss to the I-fund yesterday. I was very happy today when I saw that the I-fund had dropped only -.15%, vs. -.79% forthe S-fund, and -.36% for the C-fund.

Since I had already transfered 70% before noon EST, you can imagine how glad I was to see the small relative loss to the I-fund. I have to admit that this was a lucky shot, because I had already told Sky and Show-me that I would transfer most, if not all, to the G-fund, which I did do yesterday.

I still expect the dollar to remain weaker against the YEN and the EURO going forward; however, in the short-term, I agree with the analysts that think that the U.S. market is not yet oversold and that it has a bit further to drop. I don't know if this will happen this week, as some technical analysts believe. When it drops further, I will commit the holdings and transfer these to the I-fund. But I am testing these theories with my TSP holdings, because I am new to trading the I-fund. So far, it has been profitable to play the I-fund because of the falling dollar, although I suppose that the reverse will happen if next year, for example, the dollar starts to rise. So, we shall see what to do when the time comes. In the meantime, I hope that all readers here put their minds to work by analysing and giving their best opinions so that we can all benefit! Best Wishes and Good Luck to all!

Shortly before the market opened, Japan's Cabinet Office announced that the world's second-largest economy grew at a 0.8 percent annual rate during the April-June quarter, in its sixth straight quarter of expansion.

On a quarterly basis, the gross domestic product grew by a weaker-than-expected 0.2 percent from the previous quarter.

Japan's economy has shown signs of revival in recent years after a decade of stagnation.

In the past, the nation has relied mostly on exports, especially to the United States, to keep growth going, but in recent quarters consumers and companies have been spending and bolstering growth.

http://thestar.com.my/news/story.asp?file=/2006/8/11/apworld/20060811150723&sec=apworld

​

 

[Birchtree]

The International Monetary Fund has raised its projection for 2006 euro-zone growth slightly to 2.1%. Second-quarter figures for growth in gross domestic product, due in mid-August, are expected to show further acceleration.

But survey results are spotty, which suggests the currency bloc could be peaking. Euro-area business confidence rose further in July, but closely watched business activity indexes, including the euro-zone service survey and Germany's Ifo index, slipped. Everything's looking good in the euro zone at the moment, but there are some quite worrying clouds on the horizon.

The dips suggest growth in the euro zone will remain strong throughout the rest of the year before faltering in 2007. The main culprits: Germany's 3% sales tax increase and fiscal tightening in Italy and France, combined with a global slowdown led by a sluggish U.S. and the lagged impact of the ECB's own rate rises. After 36 consecutive quarters of growth, prospects for the U.K. also look dimmer next year.

The untying of stock indexes to local economies is picking up pace as global trade grows. Five years ago, 38% of sales at nonfinancial firms in Britain's blue-chip FTSE 100 came from the home market. By last year, that had fallen to 32%, with the remainder coming from overseas. When you buy the FTSE 100, you are not buying the U.K., you are buying global companies that happen to list in the U.K.

Many investors were anticipating that the U.S. policy makers would halt their two-year tightening campaign, potentially boosing stock markets in both the U.S. and Japan. Japanese stocks also were boosted by government data showing that bank lending grew at the fastest rate in at least five years, a further indication that the economy remains strong.

Gilligan might just be correct at a price of $25.00

 

[airlift]

The International Monetary Fund has raised its projection for 2006 euro-zone growth slightly to 2.1%. Second-quarter figures for growth in gross domestic product, due in mid-August, are expected to show further acceleration.

But survey results are spotty, which suggests the currency bloc could be peaking. Euro-area business confidence rose further in July, but closely watched business activity indexes, including the euro-zone service survey and Germany's Ifo index, slipped. Everything's looking good in the euro zone at the moment, but there are some quite worrying clouds on the horizon.

The dips suggest growth in the euro zone will remain strong throughout the rest of the year before faltering in 2007. The main culprits: Germany's 3% sales tax increase and fiscal tightening in Italy and France, combined with a global slowdown led by a sluggish U.S. and the lagged impact of the ECB's own rate rises. After 36 consecutive quarters of growth, prospects for the U.K. also look dimmer next year.

The untying of stock indexes to local economies is picking up pace as global trade grows. Five years ago, 38% of sales at nonfinancial firms in Britain's blue-chip FTSE 100 came from the home market. By last year, that had fallen to 32%, with the remainder coming from overseas. When you buy the FTSE 100, you are not buying the U.K., you are buying global companies that happen to list in the U.K.

Many investors were anticipating that the U.S. policy makers would halt their two-year tightening campaign, potentially boosing stock markets in both the U.S. and Japan. Japanese stocks also were boosted by government data showing that bank lending grew at the fastest rate in at least five years, a further indication that the economy remains strong.

Gilligan might just be correct at a price of $25.00

GOOD! THESE ARE THE TYPE OF POSTS THAT KEEP ME TRUSTING THAT WITH GOOD ANALYSIS, WE WILL BE ABLE TO NAVIGATE THE COMPLEXITIES OF THE I-FUND PROFITABLY. THANKS FOR YOUR POST!

May I add that your reference to the fact that "when you buy the FTSE you are buying global companies that happen to list in the U.K." lends further support to the forecast that in all probability the I-fund is the best place to park your retirement account for the rest of the year and sometime beyond. Even if China slowsdown, their growth rate will still be above any normal levels: and Japan as well as European companies invest there heavily! Aside from some corrections in the market I see a blue horizon.

 

[SkyPilot]

Birch, excellent post!

 

[Wheels]

Something's making the Nikkei happy.

Dave
<><

 

[Show-me]

Something's making the Nikkei happy.

Dave
<><

I'm pretty happy too. I've seen this show before and I like it.

 

[frokker]

Lets hope it holds and finishes strong!!

 

[Fivetears]

Tokyo Stocks Higher in Early Trade; Dollar Down Against the Yen
Tokyo stocks surged Monday to their highest intraday levels since May 30, shrugging off the impact of a morning power outage in capital. The dollar was lower against the yen. Stocks seen as sensitive to domestic demand drove the Nikkei higher by the end of morning trade, as Tokyo markets recovered from a dip at the open on concerns that metropolitan-area power outages might delay the start of trade. The TSE opened as scheduled Monday morning. Power was restored to all areas affected by the outages before noon, Kyodo News agency reported.
http://biz.yahoo.com/ap/060813/japan_markets.html?.v=3

 

[Fivetears]

The NIKKEI is at 235.56 (1.51%) as post time stamped.
The AORD is at 33.80 (0.68%) as post time stamped.

 

[James48843]

Nikkei up 1.76 %.

FSTE, CAC and DAX all up sharply as well.

Looks like cease fire in lebanon is giving a boost to international markets, and price of oil easing off a bit as well.

A good day today for the "I" fund.

 

[ChemEng]

I hope so... 100%I.

 

[airlift]

Opinion: The dollar appears to be rising against the YEN and the EURO. The rise in the dollar could continue if the Middle East truce doesn't hold (safe-haven). This factor should be balanced against this week's Economic numbers. If, for example, CPI and PPI in the U.S. come out higher than expected, these numbers would affect the expectation that the FED is not done raising rates, and the markets could be shaken to the downside temporarily, providing a potentially good buying opportunity to buy the dips when the markets become oversold. On the other hand, should the economic numbers show that inflation is contained, perhaps a rally could continue without the markets dropping immediately. I don't know how high though!

 

[James48843]

"EAFI" fund up + 0.73% on the open.

It's gonna be a good day.

 

[airlift]

I hope so... 100%I.

Hello ChemEng, Glad to see you here. Yesterday I saw you addressing the matter of a 2D program with Ayla. Please don't fail to keep us posted in case your tinkering with that program sheds useful information regarding the behavior of the I-fund, and the other funds also, if you wish! Thanks.

 

[sugarandspice]

A lot of members placing a stake in the I fund today. Let's hope it pays off.

 

[fabijo]

19.63 today

 

[sugarandspice]

+.726%.....about .14 cents.....the dollar is recovering......market is giving back.......so maybe.........

 

[James48843]

Wow.

Gains pretty much evaporated at the close- in the last 15 minutes for all three stock funds.

 

[sugarandspice]

I really get the feeling that the overseas markets are going to start to see that they have more of the driver's seat financially and eventually start leading the way and that the dollar will get slammed. I expect this to happen over the rest of this year but I can't just sit in the I fund and let it happen. I will not ever ride out the bumps so I will try to pick my spots and also time the I fund FV's. It seems Monday's would be the best chance at timing because if overseas is up big then U.S. markets are down and the dollar is up then it might be a good time to take the risk. Today will be a good test day because of the strength overseas and sell off in the u.S. and dollar flat agin the Euro. I will be looking at other things as well and tracking it to see if there is an edge to be gained. The FV of last week when they didn't pay me has motivated to try to find something that can exploit the FV. After last week I have a substitute word for the F part in FV.