When the I Fund won

[cswift01]

Dear TSPcenterites,

So, I've been going over the comparison data for the C, S and I funds. What I found interesting is that the I Fund "outscored" the C and S Funds for the years of 2003 through 2007. Afterwards, it only outdid the C Fund once, but either always lost in value per year or gained very little.

I'm a person that believes in political events influencing the stock market. What was going on in this time to influence the I Fund (period of 2003 to 2007)? Could it be the war in Iraq? Maybe the high oil price? The fact the Dollar was worth much less (although after 2007 it didn't increase that much in value)? I know that the majority of the value is Japan and the UK.

Me

Check this for the rates https://www.tspdatacenter.com/annual_rates

[crondanet5]

Devaluation of the dollar.

[cswift01]

Devaluation of the dollar.

That was my first thought too, however, in 2007 the I Fund had a massive loss and it only gained in 2008 (like the other funds) and since then has been stagnant. Maybe this has more to do with the Euro area's economic stagnation (and that of Japan as well) as opposed to a singular event?

On another note, I'm feeling my bullish note on the I Fund waning:

http://www.marketwatch.com/story/invest ... 2017-02-21

We'll see how the UK and Japan go. I have a bad feeling that the UK will have to deal more with this http://www.newstatesman.com/politics/uk ... -and-union very soon.

Let's see how things go.

Me

[cswift01]

Composition of the EFA ETF:

Japan 25.87%
United Kingdom 15.66%
France 9.29%
Switzerland 9.13%
Germany 9.05%
Australia 7.66%
Netherlands 4.22%

or

Europe 61.03%
Asia 37.93%

More info:

Euro 31.09%
Japanese Yen 25.87%
British Pound 15.50%
Swiss Franc 9.17%
Australian Dollar 7.66%
Hong Kong Dollar 2.84%
Swedish Krona 2.83%
Danish Krone 1.63%
Singapore Dollar 1.20%

[evilanne]

So is Australia considered to be a part of Europe or Asia?

MSCI EAFE has been in existence since 31 December 1969 (https://en.wikipedia.org/wiki/MSCI_EAFE#Countries)
With issues in Portugal, Ireland, Greece & Spain in recent years and current issues in those countries and also Italy, their is a lot of uncertainties with the I Fund.
- http://www.businessinsider.com/former-f ... ?r=UK&IR=T
- http://blogs.lse.ac.uk/europpblog/2017/ ... -problems/
- http://www.reuters.com/article/us-euroz ... SKBN15Z1NM

[Aitrus]

Australia is considered part of Australasia in the investing world.

[cswift01]

I'm not sure if anyone's still following this thread, but I found this info interesting:

https://www.poundsterlinglive.com/excha ... -forecasts

There is a projection from Morgan Stanley that the Pound and Yen will increase in value vs. the Dollar through 2018. That might make the I Fund more attractive even if the Euro is projected to lose some value through 2018 vs. the Dollar. On that note, I don't know how the upcoming European elections will play in the mix.

Enjoy!

Me

[evilanne]

Exchange rates + economic conditions & stock prices in multiple countries is way too complicated for me. I'd recommend you buy those currencies that you think will increase in value in relation to the dollar and hold it until the dollar declines to sell--probably a safer bet. Problem I see is that if the dollar declines significantly, none of the currencies will have much value. Look at the TSP Funds prices from 2008-2009
Here is an article you might find interesting https://dailyreckoning.com/the-triffin-dilemma/

[cswift01]

Exchange rates + economic conditions & stock prices in multiple countries is way too complicated for me. I'd recommend you buy those currencies that you think will increase in value in relation to the dollar and hold it until the dollar declines to sell--probably a safer bet. Problem I see is that if the dollar declines significantly, none of the currencies will have much value. Look at the TSP Funds prices from 2008-2009
Here is an article you might find interesting https://dailyreckoning.com/the-triffin-dilemma/

Very interesting. Thanks so much! I don't agree with everything he said in the article, although many points he made were valid. One issue that he made was a typical "fresh water economic" idea that debt in Dollars caused the US Dollar to lose major value in regards to other currencies. I think he's right with debt, but the debt he should mean is in regards to property and financial institutions. Also, I don't think it's the currency (as the Dollar already dropped heavily in 2003), but it was the bubble that burst. If European nations like Spain, Italy and others would have had their own currencies, then they would have dropped in value comparatively to the Dollar. Germany's assurances for the Euro kept that stable. This could be debated in many other ways...

I agree that it gets very complicated with foreign currencies. I think the idea of purchasing foreign currency is a good idea, but when you exchange into that currency and exchange back you always lose quite a bit. I would see 2 investments in other currencies as a better option such as (a) in real estate. For example, if you were to buy an apartment in London, then you would gain in both currency evaluation AND in eventual real estate increase. Another option would be (b) an international investment. I would think either a REIT focused on Europe or Japan (preferably both) or maybe something like IEFA would be a good investment, although much of this is dependent on the upcoming elections too. If France leaves the Euro (I doubt they would leave the union), then the Euro will lose a lot of confidence and we'll be looking at an internal crisis that would last some years (thereby depressing the Euro).

As you said...its complicated.

Best,

Me

[wwwtractor]

Year # of Allocations YTD Return (?)
2009 1 Allocation Change +45.30%

was a good year for the I fund for me.

Some information is available here:
http://www.forecasts.org/

[cswift01]

Year # of Allocations YTD Return (?)
2009 1 Allocation Change +45.30%

was a good year for the I fund for me.

Some information is available here:
http://www.forecasts.org/

Thanks for the link. Its interesting what they project for the currencies and for the different funds (e.g. S&P 500). It would seem that other currencies just keep gaining vs. the Dollar and that May will be awful for all funds.

What is your experience with their accuracy? I would assume that they would change their projections as time goes on.

Me

[wwwtractor]

http://www.forecasts.org/accuracy/accuracy.htm