Short term market outlook

**IBD Fan** · 01-09-2005, 10:52 PM

Hi Tom and all. Im a new member that has been seriously reviewing the chat here for the last few weeks. Great site and appreciate the opportunity to get other opinions and information. I havent seen too many comments on the Investors Business Daily as a tool to follow the market. So in the interest of trying to help other fellow TSPers, especially with all the mixed signals at this time I would like to add another source to the many that are followed here. In my view the use of the IBD - Big Picture column is a simple way to follow the market pulse. Here are some postings in the column for the last week regarding the current outlook (note the date of the issue reflects on the market activity for the previous trading day):

4 Jan 05: Market in a confirmed rally (has been the same comment for many months)

5thru 7 Jan 05: Rally under pressure; consider raising cash

10Jan 05: Rally all but dead; follow sell rules, consider raising cash

This has helped me to confirm my past transfer from 50%S and 50% C to 100% G effective 6 Jan 05. I had been in the same allocation for over a year until I just switched. My retirement horizon is 4 years. I havent figured out yet how to calculate my returns using the tsptalk calculator but like many others made a nice profit in the last year.

I havent yet figured out what is a good indicator in the IBD for the I fund but it seems too complicated for a single simple "pulse".

**Comstock** · 01-10-2005, 12:31 PM

IBD fan - thanks for the tip!:^ I'm a new member myself. Where do you find the IBD Big Picture colums? Thanks . . .

**IBD Fan** · 01-11-2005, 09:38 AM

Hi Comstock,

Welcome! You may find the Big Picture column on the front page of each hard copy issue of the Investor's Business Daily financial newspaper. Good Luck:^

**Comstock** · 01-11-2005, 11:32 AM

Thanks again, IBD fan. I found the on-line site as well, but you need a membership to access the article. Take care . . .:^

**tsptalk** · 01-11-2005, 02:09 PM

IBD Fan wrote:

Hi Tom and all.

Welcome IBD!

**Rolo** · 01-12-2005, 12:52 AM

Welcome, IBD Fan!

That reminds me...I've completely forgotten that I had a subscription and can access their web site! D'oh!

(I have it on hold until I move.)

**IBD Fan** · 01-23-2005, 05:20 AM

I'm back from a trip and just want to update the IBD market pulse.

11 Jan 05: Rally all but dead; follow sell rules; consider raising cash

12 - 18 Jan 05: Rally dead; follow sell rules; consider raisng cash

19 - 24 Jan 05: Market in correction; follow sell rules; consider raising some cash

Also I found an indicator in the IBD for the I fund in the World Stock Markets(a list of charts that includes a chart for the EAFE). But what I havent found is that single simple indicator to give the "pulse" for the I fund whcih I think may be too complicated. Does anyone have such an indicator?

#8 · 01-24-2005, 10:29 AM

Yeah, I do. Follow the US Dollar Index. Assume that the I fund will approximate the return of the C fund and then factor in the % advance/decline of the dollar. Also the indicator that Tom lists here is very good (EFA).

**IBD Fan** · 01-25-2005, 07:21 AM

Thanks Sarah and Tom (I saw the chart on the US Dollar today):^. Would be nice to see the two charts side by side (US Dollar and the EFA) on the same scale and time periods to see how closely they track. Anyone guess how much the contribution of the US Dollar is on the impact of the EAFE or the EFA?

It seems if I were to put money in the I fund, I would want to track the progress along with projections at the site indicated by one of the members (barchart.com) but I am too inexperienced in that area and need to learn what the Trendspotter data represents. I guess there are other similar sites that tracks the EFA and provides projections. My guess is (similar to stocks) a few analysts evaluations are better than one.:shock:

**tsptalk** · 01-25-2005, 01:53 PM

IBD Fan wrote:

Anyone guess how much the contribution of the US Dollar is on the impact of the EAFE or the EFA?

http://www.msci.com/equity/index2.html

This site updates only once a day but it shows how the EAFE index did inforeign currency and US dollars. You can see the effect pretty clearly.

**IBD Fan** · 01-26-2005, 07:24 AM

Mr Tom your advice is super as usual.:dude: The site you gave has so much data thatI could go dizzy trying to figure out what to look for - just goes to show how much of a novice I am when it comes to investing in the I Fund. Imust study it more and read the postings on this site to learnsome good practices and how to make wise decisions about when to jump into it and when to get out. Have notinvested in itin the past but am considering it.

Just seems like the variables in the I Fund are so much more complicated then the US stock markets which off course is a puzzle in itself.:shock:

Would you say that investing in the I Fund at this time is more like 25% International equities and 75% US dollar currency fluctuation dependent? or is it more like 100% dependent? I know this is trying to make it sound too simple but thats how I like to think - in simple terms. I also think that the investing climate is fluid (thats why I used the term "at this time") and can change rapidly.

#12 · 01-26-2005, 10:51 AM

IBD Fan wrote:

Would you say that investing in the I Fund at this time is more like 25% International equities and 75% US dollar currency fluctuation dependent? or is it more like 100% dependent? I know this is trying to make it sound too simple but thats how I like to think - in simple terms. I also think that the investing climate is fluid (thats why I used the term "at this time") and can change rapidly.

The website that Tom referred you to can give you a fairly good idea. It shows you that YTD, EAFE is up0.10% but in US Dollars it is down 3.25%. Now lets look at the USD Index. It wasabout 81.3 on January 1 and is currently about 84 -a rise of 3.32% So essentially the entire decline in the I fund since January 1 is attributable to the rise in the USD.

We can also gather from these stats that, thus far this year, the world markets that compose the EAFE are outperforming the US markets, since they are basically flat for the year. US markets have been downsignificantly (4%).