According to National Business Report, we may be in for some bloodletting on the I-fund.
Dollar continues down and so does the I-fund. What am I missing?
Dell
Dell,
Here is my opinion.
Don't look at it as a weak Dollar, more like to strong a Yen, Euro, and Pound. When the Yen, Euro, and Pound gets to strong their exports suffer because they are more expensive to the US, China, and others.
When the dollar falls what happens to the OSM? They react badly because the companies that are in their indexes don't want the Dollar weak because of the exports.
Another thing is tourism. Weak dollar means less Americans traveling abroad spending disposable income.
How about all that U.S. DEBT those other countries are holding for us. How would you like to constantly see your investment going down. But, they know if they sell their position in Dollars it will be worse.
Bottom line is playing the I fund with a very weak Dollar is a delicate balance. If it falls to fast, swoosh, OSM falls fast.
I am believing that the opposite play to the fast falling USD is the C fund. Global companies from the US, that foreign investor will pump their strong currencies into because they can get more USD/unit of their currency to buy them with.
I could be wrong too. I'm going to what the stream of NBR. See ya.