Playing the I fund

[Spaf]

From what I was taught the cut bait was 5% for a fund, 2% for a portfolio. Try the math.....for a 50% loss you have to have a 100% gain....Ouch!
That's the reason stops are recommended. Now I use trailing stops. I set mine at a 1% alert and a 2% trail. The three major factors I watch are the economy (fundamentals), the analysis indicators of overbought/oversold (RSI)and the market trend up or down (MACD/STO).

Your right, averaging down is not recommended! You have to know the fund, the economy and other factors, some of which you'll never know. I didn't factor in the mideast crisis. That got a little painful, especially if it would have spread, see you don't know where the bottom is at and for how long! And, how long will your money be tied up! Certain condition have to be presant before I do it; a high recon, a low recon, and armed trails.

Im still very much a newbie here, but whats the problem with Averaging Down? It seems like a decent way to reduce the gains required to break even in a fund thats dipping. I suppose the recommended strategy would be to cut bait, take the loss, and try again elsewhere?

 

[airlift]

Im still very much a newbie here, but whats the problem with Averaging Down? It seems like a decent way to reduce the gains required to break even in a fund thats dipping. I suppose the recommended strategy would be to cut bait, take the loss, and try again elsewhere?

I don't think there is anything wrong with averaging down, as long as the intermediate indicators show (which they do), that the trend is to the upside. I believe that Spaf was refering to averaging down in an index fund, after the TSP talk website (Tom Crowley) analysed different indicators that showed there would be a correction in Q2. As you know the correction started in May. Spaf believes, as Tom noted in this morning's commentary, that the market should take a breather soon, and if this happens we can buy at a lower price. I think they are on to something. I accepted their viewpoint because at least I can preserve capital to make a more profitable comeback. If the correction doesn't occur, I am still partially invested in the I-fund, but I can avoid a greater loss this way.

 

[ChemEng]

Ahh gotcha... He was saying it was the wrong action for this past correction. That makes sense... Thanks!

 

[Gilligan]

Ballpark is +0.226 in LC, dollar is about -0.10% so USD would be about +0.326 and that should put the I fund around $20.12 but my guess was off by 9 cents yesterday.

MSCI figured the dollar 0.05 % higher. +0.333 in LC and +0.283 in USD which should put the I fund around $20.11 before any possible FV. And I hate to say this but this looks like a FV day, maybe -.10 cents.

 

[sugarandspice]

It does look like they will be taking away today. TSP says it happens less than 20% of the time. Well if it happens today that represents 50% of this week. Maybe they(tsp) should revisit that stat.


I'm thinking it should have moved up .05 cents today.

Feels like it's gonna get worse today.

 

[Wheels]

TSP says it happens less than 20% of the time. Well if it happens today that represents 50% of this week. Maybe they(tsp) should revisit that stat.

Remember when they correct the FV that doesn't count as an FV.

Dave
<><

 

[fabijo]

MSCI figured the dollar 0.05 % higher. +0.333 in LC and +0.283 in USD which should put the I fund around $20.11 before any possible FV. And I hate to say this but this looks like a FV day, maybe -.10 cents.

Yup. You're right about 20.11 and the FV. -.5% FV sounds logical.

 

[sugarandspice]

G+.01
F-----
C+.02
S+.02
I+.06----NO FV--They kept it even (take note people,shows how much I know.....nothing)

 

[James48843]

As of time stamp:

NIKKEI 225- Green 0.53%
FSTE 100 - Green 0.49%
CAC - Green 0.07%
DAX - Red -0.04%

Dollar:
Our favor slightly on the Yen
Against us slightly on the Euro.

Looks like another slightly "green" day ahead.

 

[JOVARN]

Thu Aug 17, 2:23 PM ET
LONDON (AFP) - The dollar weakened further after fresh signs of a slowing US economy sank expectations that the US Federal Reserve will lift interest rates.
http://news.yahoo.com/s/afp/20060817/bs_afp/forexeurope_060817182320



AFX UK Focus) 2006-08-18 09:37 GMT:
Forex - US dollar slightly lower in afternoon Asian trade on profit taking

Article layout: raw
SINGAPORE (XFN-ASIA) - The US dollar fell back slightly in afternoon trade giving up some of its overnight gains as some light profit taking emerged, dealers said.

The greenback had put on solid gains in New York overnight following the release of a better-than-expected Philadelphia Federal Reserve manufacturing survey which jumped to 18.5 index points in August from 6.0 a month earlier.
---------------------------------------------------------------------------------------------------------------------------------------------------------------
Nikkei ends week of solid gains
Japanese index up 3.5% as U.S. interest rate fears abate.
August 18 2006: 3:55 AM EDT

SINGAPORE (Reuters) -- Tokyo shares climbed Friday to score their third best week of the year on hopes the United States will escape a growth-sapping interest rate rise.
In the next half-year, IT consumption is going to increase, so most investors expect earnings to be better than in the first half," said Cho Seong-joon, an analyst at Meritz Securities in Seoul.
The euro climbed as high as ¥148.90 yen its highest level since the single currency was launched in 1999, as investors eyed widening interest rate differentials between the euro zone and Japan.
http://money.cnn.com/2006/08/18/new...ts.global.reut/index.htm?section=money_latest

 

[fabijo]

Of course, I'm doing the opposite of everything. I rode the drop all the way down hoping for it to come back up. Now I'm out hoping for it to come back down. Whatever step I take, it all goes the other way.

 

[post]

Of course, I'm doing the opposite of everything. I rode the drop all the way down hoping for it to come back up. Now I'm out hoping for it to come back down. Whatever step I take, it all goes the other way.

fabijo, tell me when you get back in. I'm out.

 

[Wheels]

Of course, I'm doing the opposite of everything. I rode the drop all the way down hoping for it to come back up. Now I'm out hoping for it to come back down. Whatever step I take, it all goes the other way.

We've all been there. Keep at it though. Eventually you'll find a groove and things will start clicking.

Dave
<><

 

[airlift]

I have taken some profits just in case we have a drop in the next few days, and this way I can buy at lower prices. Anyone else taking profits with the lower Michigan Consumer confidence numbers and corporate expectations going forward? With the Chinese raising rates .27 basis points on the YUAN, does anyone here feel thatthe impact of a drop in the U.S. markets on the I-fund (EAFE and EFA) can be reduced or contained or offset by a lower Dollar?

 

[SkyPilot]

Sponsor, those are excellent questions... The falling USD should be the dominant factor going forward, if it drops... Don't think the drop will be precipitious though, so hopefully it will not shock the US markets, thus driving down the EAFE as well.

 

[airlift]

Sponsor, those are excellent questions... The falling USD should be the dominant factor going forward, if it drops... Don't think the drop will be precipitious though, so hopefully it will not shock the US markets, thus driving down the EAFE as well.

Thanks!

 

[Gilligan]

Ballpark: Local currency is +0.129%, the dollar is volatile this morning, my guess is +0.3% from yesterday at this time, that should put the EAFE in USD about -0.171, thus the I fund should close around $20.08 before a possible FV.

 

[sugarandspice]

Down .305 according to MSCI EAFE .....06 cent loss?

 

[SkyPilot]

If so, that returns us to Wednesday's price. Hope we are building a base to go up another % or so...

missed the big run up, darn it...

 

[SkyPilot]

Looks like the EFA may end up + at the end of the day, with quite a spread from the MCSI. So, now an upward FV might be more possible? Cutting the probable 6 penny loss to closer to even... please... hoping... maybe? :blink: