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Playing the I fund
- Thread starter clester
- Start date
ebbnflow said:
This is correct. Just a couple of minor points though. Monday's was more than likely just a rounding issue. FV's would not likely be this small. And secondly, Fridays would be considered the correction of all the other FV's, but not an FV itself (just symantics).
A crazy week. Don't normally see so much manipulation in consecutive days.
Dave
<><
I would love to get back to 70%I 30%S as I am only 1-2 + market days from getting back to where I was on May 15th.
I fund looks great for the long term but in the short,(this week), with the price of oil at $73.+/B whats your best guess for the price of oil off setting any gains the I fund may have seen from the falling dollar?
I fund looks great for the long term but in the short,(this week), with the price of oil at $73.+/B whats your best guess for the price of oil off setting any gains the I fund may have seen from the falling dollar?
SkyPilot
Well-known member
From TSP.GOV
Why doesn't the change in the I Fund share price always correspond to the EAFE Index which it tracks?
Participants have asked why, on some days, the change in the I Fund share price reported by the TSP does not match the change reported for the Morgan Stanley EAFE (Europe, Australasia, Far East) index, which the I Fund tracks. This happens when the Board's investment manager, Barclays Global Investors (BGI) reprices its EAFE Equity Index Fund, in which the TSP invests, after the close of the foreign markets. This process, known as "fair valuation" or "fair value pricing" occurs when there are large U.S. market or currency movements between the time the foreign markets close and 4:00 p.m. eastern time, when BGI's share prices are determined.
Fair value pricing is used by mutual funds when there is a gap between the time the index closes and the time the fund is priced to reflect the index. Fair value pricing was implemented to protect long-term shareholders from short-term traders attempting to profit from price difference between the index's closing price and the price of the fund before it was repriced. While it causes some variation in daily pricing, the variation is generally reversed the next day.
Fair value pricing in the TSP's I Fund occurs less than 20% of the time. The TSP is meant to be a long-term retirement savings account, not a short term trading vehicle. Mutual funds use fair value, redemption fees, and limits on numbers of trades to prevent market timing activity and the resulting excessive trading costs from hurting the performance of the fund. To date, the TSP has chosen to use only fair value pricing, but that may change in the future.
Fair valuation ensures that traders cannot "market time" the I Fund by making investment decisions based on the "stale" prices, thus diluting the returns of other participants who invest in the I Fund. Because the EAFE uses the foreign market closing prices to calculate its values, its price change will differ from the TSP's on those days.
Why doesn't the change in the I Fund share price always correspond to the EAFE Index which it tracks?
Participants have asked why, on some days, the change in the I Fund share price reported by the TSP does not match the change reported for the Morgan Stanley EAFE (Europe, Australasia, Far East) index, which the I Fund tracks. This happens when the Board's investment manager, Barclays Global Investors (BGI) reprices its EAFE Equity Index Fund, in which the TSP invests, after the close of the foreign markets. This process, known as "fair valuation" or "fair value pricing" occurs when there are large U.S. market or currency movements between the time the foreign markets close and 4:00 p.m. eastern time, when BGI's share prices are determined.
Fair value pricing is used by mutual funds when there is a gap between the time the index closes and the time the fund is priced to reflect the index. Fair value pricing was implemented to protect long-term shareholders from short-term traders attempting to profit from price difference between the index's closing price and the price of the fund before it was repriced. While it causes some variation in daily pricing, the variation is generally reversed the next day.
Fair value pricing in the TSP's I Fund occurs less than 20% of the time. The TSP is meant to be a long-term retirement savings account, not a short term trading vehicle. Mutual funds use fair value, redemption fees, and limits on numbers of trades to prevent market timing activity and the resulting excessive trading costs from hurting the performance of the fund. To date, the TSP has chosen to use only fair value pricing, but that may change in the future.
Fair valuation ensures that traders cannot "market time" the I Fund by making investment decisions based on the "stale" prices, thus diluting the returns of other participants who invest in the I Fund. Because the EAFE uses the foreign market closing prices to calculate its values, its price change will differ from the TSP's on those days.
JOVARN said:
I want to share my opinion with you. There are no guarantees that I am correct on this, but perhaps it will help others in this thread a little bit. As we go further into the week we will be getting more informaton. We might (or not) get lots of new investments from institutions, mutual funds, and hedge funds in the first couple of days of July, because I have read that many big pockets as those mentioned, were caught off-guard in this rally and apparently they are underinvested. Now they might play catch-up. If that happens, we who are already invested in the stock market stand to benefit from the rising tide caused by new inflows of money. Many of those funds were also hit very hard by the intensity of the correction that began in May. If we have truly bottomed, we should see up from here. Keep in mind that indexes and stocks do not go up (or down) in a straight line. The recovery from June is occurring.
However, some technical analysts believe that we will be overbought around the 5th. 6th or thereabouts, because the recovery has been parabolic and the markets need to take their time to adjust and absorb the buying and selling dynamics. Nobody knows if this will come to fruition or how deeply we would be correcting even if for a short-time. What I have seen from the counsel coming from more knowledgeable persons than me, is that unless you are commtted to an inflexible buy-and-hold strategy you should sell some, but not all, and go into cash. For us, cash means going into the G-Fund. Once the correction is finished (hopefully in a few days) after the correction begins, the markets become oversold again, and then you take that small portion that you have in the G-fund, and again transfer it to C, S, or I. Sounds complicated or simple. This is the general idea. Since we appear to have seen the bottom, the trend is now to the upside. I am assuming that you were able to buy shares on the cheap, near the lows. The bulk of your investment stays invested in the stock funds, but you take some profits as I explained above, and then re-purchase at lower prices as the market becomes oversold. This is only my opinion, Stay close to Tom Crowley, because he is knowledgeable, and is currently fully invested in the stock funds. If you want to take more risk than Tom, it is your choice, but he intends to give early warnings as much as he can do so.
Yes, oil is going up; and, coincidentally, IRAN has until the 5th or 6th of July to say to the United Nations what their decision is regarding nuclear development. This could shake the markets one way or the other. Because much of market behavior is influenced by emotions, the price of oil could keep rising or dropping..., as speculators do the trading. But oil might go down some if IRAN gives us good news of their intentions!!... If you take some profits made from the lows we had last week, you can ride the market up and down. By keeping some % in cash; you can come back at better prices with that money, in case there is a correction. My best wishes!
sponsor said:
Thank you for the information..
I bought in late Nov 2005 did well and got caught sleeping May 2006 and have paid for it.
Profits went up in smoke, but stayed 100% between I and S and was planning to stay there. I may take some off the table and average it back in
Thanks Again
JOVARN said:
Welcome! Keep some dry gunpowder ready, but it seems that now is the time to be fully invested in the stock funds. Keep a core percentage always in the trend. Now, the trend seems to be to the upside, and buy some when the markets do a correction - and the upside starts all over again until they become overbought. Tom is a good early bird!
SkyPilot said:From TSP.GOV
Participants have asked why, on some days, the change in the I Fund share price reported by the TSP does not match the change reported for the Morgan Stanley EAFE (Europe, Australasia, Far East) index, which the I Fund tracks. This happens when the Board's investment manager, Barclays Global Investors (BGI) reprices its EAFE Equity Index Fund, in which the TSP invests, after the close of the foreign markets. This process, known as "fair valuation" or "fair value pricing" occurs when there are large U.S. market or currency movements between the time the foreign markets close and 4:00 p.m. eastern time, when BGI's share prices are determined.
Fair value pricing is used by mutual funds when there is a gap between the time the index closes and the time the fund is priced to reflect the index. Fair value pricing was implemented to protect long-term shareholders from short-term traders attempting to profit from price difference between the index's closing price and the price of the fund before it was repriced. While it causes some variation in daily pricing, the variation is generally reversed the next day.
Fair value pricing in the TSP's I Fund occurs less than 20% of the time. The TSP is meant to be a long-term retirement savings account, not a short term trading vehicle. Mutual funds use fair value, redemption fees, and limits on numbers of trades to prevent market timing activity and the resulting excessive trading costs from hurting the performance of the fund. To date, the TSP has chosen to use only fair value pricing, but that may change in the future.
Fair valuation ensures that traders cannot "market time" the I Fund by making investment decisions based on the "stale" prices, thus diluting the returns of other participants who invest in the I Fund. Because the EAFE uses the foreign market closing prices to calculate its values, its price change will differ from the TSP's on those days.
Without subtracting value from others who have helprd me understand FV, I think this is a good explanation. Thanks.
Bank of Japan May Raise Interest Rates Next Week, First Time in Six Years
The Bank of Japan will probably raise interest rates for the first time in almost six years next week after a report indicated companies plan to increase spending at the fastest pace in 16 years, a survey showed.
Governor Toshihiko Fukui and his policy-board colleagues are likely to increase the benchmark overnight call rate from near zero at the end of a two-day meeting on July 14, according to nine of 15 economists surveyed by Bloomberg News.
The Bank of Japan would join the U.S. Federal Reserve and the European Central Bank in raising rates as faster global economic growth and near-record oil prices stoke inflation. The Fed raised its benchmark rate a 17th straight time to 5.25 percent on June 29. The ECB may signal further increases in its key rate, now at 2.75 percent, when policy makers meet on July 6.
July 4 (Bloomberg)
http://www.bloomberg.com/news/economy/economies.html
The Bank of Japan will probably raise interest rates for the first time in almost six years next week after a report indicated companies plan to increase spending at the fastest pace in 16 years, a survey showed.
Governor Toshihiko Fukui and his policy-board colleagues are likely to increase the benchmark overnight call rate from near zero at the end of a two-day meeting on July 14, according to nine of 15 economists surveyed by Bloomberg News.
The Bank of Japan would join the U.S. Federal Reserve and the European Central Bank in raising rates as faster global economic growth and near-record oil prices stoke inflation. The Fed raised its benchmark rate a 17th straight time to 5.25 percent on June 29. The ECB may signal further increases in its key rate, now at 2.75 percent, when policy makers meet on July 6.
July 4 (Bloomberg)
http://www.bloomberg.com/news/economy/economies.html
http://www.bloomberg.com/news/markets/currencies.html
This article indicates that there is some dissent in Europe (ECB) and Japan (BOJ) as to whether or not to raise rates. I guess dissent is to be expected, so any other views will be appreciated.
This article indicates that there is some dissent in Europe (ECB) and Japan (BOJ) as to whether or not to raise rates. I guess dissent is to be expected, so any other views will be appreciated.
Fivetears said:
This coordinated effort by CB's will provide them more ammunition for another round to drain the equity swamp of ill-informed(some refer to these players as "dumb money") investors. As the CB's continue to aim their collective guns at the speculators and hedge funds, equity players will absorb the wrath. We're approaching a crossroads of sorts throughout the investing world as to what constitutes REAL from PERCEIVED value. Good luck.
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