Explain Please

[k2ds]

I don’t understand. Today the I fund (EAFE) closed up +0.54% but the fund lost .05.

How’s that? Am I missing something. :?

[tsptalk]

The dollar has a lot to dowith the action of the I fund. If the EAFE was flat on the day (not up or down) the action of the U.S. dollar against the other country's currencies has an affect of the I fund. When the dollar is up, itbrings the I fund down, and when it's down, the I fund benefits.

Hope that helps,
Tom

[Wheels]

Tom,

I noticed that your EAFE quote is radically different that the quote I get if I look up EFA (the ticker symbol for the EAFE). Are you getting your quote from somplace that is automatically calculating the effect of the dollar? This might make sense since the dollar is up today and you're showing the EAFE way down but I'm getting a quote slightly up.

Dave

[tsptalk]

No. I watch the MSCI EAFE NDX (AMEX:^EFV). I noticed that the ISHRS MSCI EAFE (AMEX:EFA)does not match it but neither match that of the I fund because of the dollar.

I don't know how they calculate these indices so they while they aren't accurate, they give us a prettygood idea of how well the I fund will do.

Tom

[Wheels]

Well now I'm totally confused. Right now the EFV is down about a percent. The EFA is up about half a percent. So which one does the I fund track? Do we know?

Dave

[tsptalk]

That is odd. They both track the Morgan Stanley EAFE index. The difference I believe is that the ^EFV is the index and EFA is a traded "stock" like the QQQ is the traded stock of the Nasdaq 100.

Theone constant is that they are both inconsistent with the I fund. One day one is more accurate, the next day the other. I really don't know.

Tom

[Wheels]

I fired off an e-mail to Morgan Stanley. If they give me anything that helps clarify, I'll post it here.

Dave

[Wheels]

Here's what I'm thinking. If I'm not mistaken, the dollar rose against most currencies yesterday. This would have hurt the I fund return (according the theory offered here that we have sort of accepted as true). So if the EFV was down almost a percent, and the EFA was up over half a percent, and the I fund posted a three cent gain, common sense tells me we should be watching the EFA and not the EFV.

Any thoughts (other than that I am a rambling idiot). :D

Dave

[tsptalk]

Keep an eye on it Dave. See if it is consistent. I watch it a while back and it seems to be off some days also. Let us know. Thanks!

Tom

[chicago30]

was just reading an article in the recent (for baghdad) april issue of kiplinger's magazine. featured writer jeremy siegel has stated he believes that the dollar has bottomed out against the foreign currency (namely the euro). living in europe the past 3 years (aside from being down in this paradise), the dollar has plunged from about dollar buying 1.20 euros to about 75 cents. in the past few weeks the dollar has gained back ground to about 79-80 cent area.

he suggest that people keep some of their stocks in the overseas markets but keep most of it in the U.S. Stock market. he had a great closing that makes sense to me "if you lose big abroad, nobody sheds a tear for you. if the U.S. markets take a beating, however count on washington to take some measures to ease your pain.

i am keeping 20% in the I fund for now.

mike

[AllexBancs]

Mike,

Nice post. Thanks for the info. AB:dude:

[fabijo]

he had a great closing that makes sense to me "if you lose big abroad, nobody sheds a tear for you. if the U.S. markets take a beating, however count on washington to take some measures to ease your pain.

This walk down memory lane is proving to be pretty informative!

[Frixxxx]

was just reading an article in the recent (for baghdad) april issue of kiplinger's magazine. featured writer jeremy siegel has stated he believes that the dollar has bottomed out against the foreign currency (namely the euro). living in europe the past 3 years (aside from being down in this paradise), the dollar has plunged from about dollar buying 1.20 euros to about 75 cents. in the past few weeks the dollar has gained back ground to about 79-80 cent area.....

Chicago,

Oil has been retreating 147~99 barrel, most of the strength in the dollar has come from this. As far as markets go, I feel that this is a global issue, no market is safe. The bill that you see before you IMHO will cause the dollar to rally for a while if passed. If not, short every USD currency you can find. This promise of corrrection is all that is holding the dollar where its at. We are still fragile!:cool:

[Rustynutt]

Sure hope so. I need to purchase a rather large Euro sum, but can't do it until second week of December. Sure would be nice to get a good exchange rate before all heck breaks loose between now and then.

[Birchtree]

The dollar historically has traded in 7 year ranges - I wouldn't be in any hurry to buy euros at this point - perhaps on a dollar cost averaging approach a little at a time.

[Rustynutt]

Unfortunately it's a debt that must be covered by May 09. Maybe they'd take dollars instead :) I don't intended to hold them for longer than it takes to do the transaction, so devalued is the best deal.