Playing the I fund

[FundSurfer]

What formula do they use to set the FV rate? If the dollar has been dropping for two days, for instance, and the investor has been in the I-fund for some time, why would FV be given or taken away so frequently? Thanks to anyone who might help me understand this!

Sponsor, the purpose of the FV is to not give traders the ability to take advantage of stale prices and value of the dollar. Yesterday, the foriegn markets closed up, but in the afternoon, after foriegn markets had closed, the value of the dollar dropped and the value of the foriegn markets increased. Since the foriegn markets close by around noon eastern and the index value is figured by 2-3 o'clock, if an FV did not occur, traders could buy the index at 4'oclock for 2'oclock prices. This would cheat those owners of the index prior to the run-up. Yesterday, a 40 cent FV meant that the index COB price (at 4'oclock) reflected the decrease in value of the dollar and increased value of foriegn stock even though those markets were closed.

Hope that helped.

 

[ebbnflow]

It helped. Here's more from TSP TALK's TSP Funds Page:

 

[airlift]

SkyPilot and FundSurfer,
Thanks

 

[FundSurfer]

I'm guessing we get about $0.30 today. I'd be quite happy with that and the FV would be about even +/- a couple cent.

 

[airlift]

Ebbnflow,
Some days ago, I believe it was you who mentioned trying to trade these stock funds. Someone this morning asked a question regarding how to trade this, etc. I also am trying to time this market, as I am sure all of us are aware that Tom Crowley is also attempting to time the market! The point I want to share with you all, is that it seems that unless one decides to be a long-term buy-and- hold investor, it should be easier to buy a high percentage in the I-fund (only if you determine that the trend for the U.S. dollar is lower) and leave that part it alone. Then, one can use another amount of the funds to trade the U.S. funds around, with the use of technical indicators. At least, the U.S. funds don't have to take into account the currency fluctiuations on a daily basis. I will appreciate any other ideas!?

 

[Wheels]

I'm guessing we get about $0.30 today. I'd be quite happy with that and the FV would be about even +/- a couple cent.

Agreed. I was pretty happy with my S fund return for the week, but it looks like you will widen your lead with that 60% stake in the I.

Don't look back though, nipping at your heels.

Dave
<><

 

[FundSurfer]

...Don't look back though, nipping at your heels.
<><

Don't worry, I'm keepin' tabbs on ya. Our positions were reversed not too long ago and the year is only half over.

 

[ebbnflow]

I am guessing +.26 cents for the I Fund from 19.13 to 19.39. I think we still have a +1.375% FV hanging up there. I may be wrong and I hope I'm wrong, since +.30 cents sound much better than +.26 cents.

Sponsor, I choose to trade between the I Fund and the F Fund only. That's only because I'm more familiar with the I Fund than most funds, so I stuck with it. We all have our own risk/pain tolerance :blink: and strategies. I wouldn't recommend my own strategy of trying to time the market if you're new at it. I make an average of two IFTs a week, but it's very risky. Before I tried my tracker for this year, I did last year's TSP first, got my timing right, tweaked it, tweaked it some more. When I'm satisfied that I'm getting over 70% of my picks right, I'm done. If you check the price chart for the I Fund that I posted, even on a couple terrible months (May/June) you still have a 50/50 chance of getting your picks right. Just make sure any system you develope gets you way over 50%.

 

[ebbnflow]

I am guessing +.26 cents for the I Fund from 19.13 to 19.39. I think we still have a +1.375% FV hanging up there. I may be wrong and I hope I'm wrong, since +.30 cents sound much better than +.26 cents.

It's +2.21% FV and not +1.375%. So +3.585 - 2.21 = 1.375 or .26 cents.

 

[airlift]

I am guessing +.26 cents for the I Fund from 19.13 to 19.39. I think we still have a +1.375% FV hanging up there. I may be wrong and I hope I'm wrong, since +.30 cents sound much better than +.26 cents.

Sponsor, I choose to trade between the I Fund and the F Fund only. That's only because I'm more familiar with the I Fund than most funds, so I stuck with it. We all have our own risk/pain tolerance :blink: and strategies. I wouldn't recommend my own strategy of trying to time the market if you're new at it. I make an average of two IFTs a week, but it's very risky. Before I tried my tracker for this year, I did last year's TSP first, got my timing right, tweaked it, tweaked it some more. When I'm satisfied that I'm getting over 70% of my picks right, I'm done. If you check the price chart for the I Fund that I posted, even on a couple terrible months (May/June) you still have a 50/50 chance of getting your picks right. Just make sure any system you develope gets you way over 50%.

Ebbnflow,
I haven't been able to locate your post with the price chart for the I-fund. Can you help me locate it?

 

[tsptalk]

The dollar has sure been whacked the past two days. :blink:

 

[ebbnflow]

Ebbnflow,
I haven't been able to locate your post with the price chart for the I-fund. Can you help me locate it?

http://www.tsptalk.com/mb/showthread.php?t=2551&page=123

 

[airlift]

http://www.tsptalk.com/mb/showthread.php?t=2551&page=123

Thank you!

 

[Wheels]

FV is balanced everyday by Barclay's. Sometimes it will make a difference, sometimes not. Therefore, each days FV balance is independent, and is not really ever over or under as it appears to some (as in the I fund is "owed" or "owes"a certain amount). *This is my observation, and some may disagree with great fervor.

Well I wouldn't say I disagree with great fervor but I don't exactly agree either.

The I fund is supposed to match the Morgan Stanley Capital Investment Europe, Australia and Far East index. (MSCI EAFE). Most days it does. On some days however, (not everyday as you suggest but less than 20% of the time according to TSP) Barclays (the company that actually manages the fund that our money is in) applies a process known as fair valuation. On those days, the I fund pays either more or less than the MSCI EAFE. This is not some member's perception. This is a fact. When it happens, Barclays will (they have to) correct the adjustment within a few days.

I try to shorten this explanation each time I give iy but in doing so I am sure I am leaving things out.

Dave
<><

 

[SkyPilot]

As I said, on some days it will make a difference, some days not (20% of the time it will), never mind...

 

[Birchtree]

The weak dollar will begin to help the SPX in the second half. Gotta enjoy them exports.

From my vantage point sitting in the C fund - some observations recently.

Who liked the I fund at $20.95 - everybody including Wimpy.

Who liked the I fund at $18.40 - very few excluding Wimpy. He has the Maginot Line. The come back trail may be a short one.

 

[Wizard]

The weak dollar will begin to help the SPX in the second half. Gotta enjoy them exports.

We only export 3 things; jobs, debt and airplanes.

And plane sales are down 20%. :worried:

 

[Birchtree]

Allah be praised - the SPX generates 40% of its' revenues from exports - but of course you knew that. What are you thinking?

 

[Wizard]

Allah be praised - the SPX generates 40% of its' revenues from exports - but of course you knew that. What are you thinking?

Ahh Birchy, the products that generate 40% of revenues in foreign countries (i.e. McDonalds, PG, Pepsi, Coke, Microsoft, 3M) are not actually made in the US. They are made in the host country by workers that were outsourced from the U.S. to work in the U.S. factory in another country and counted as foreign revenues - that should not be confused with EXPORTS. Real exports are products made in the U.S. and shipped overseas to sale. Take a stroll through a department store and try to find a dozen items MADE IN THE U.S.A.

Maybe if you actually travelled and went shopping in a foreign department store you would not sound so naive about reality. Because anyone that lives overseas must be LTAO reading your posts. I know I am.

Why do you think they outsource manufactoring jobs and close factories in the U.S. for?

 

[Birchtree]

You need to get out of Ohio and visit factories overseas. They are buying industrial machinery to make their products. Cap-ex spending will lead the economy going forward. And when you KMA be mindful not to leave any hickies.