Collapse in Oil Hurting the I-Fund ?

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dcramer29
Posts: 327
Joined: Thu Jan 12, 2012 10:56 am

Collapse in Oil Hurting the I-Fund ?

Post by dcramer29 »

Screen%20Shot%202015-03-12%20at%2011.59.51%20AM.png


Screen Shot 2015-03-12 at 12.00.12 PM.png


Noticed that the EFA is about 5% energy. Since the oil collapse started last June, the EFA also started it's trend lower, while the S&P and Wilshire continued it's march upward.

Since the beginning of the calendar year, the I-Fund was hot. Oil had also started to move back to the upside at the exact same time.

I'm speculating that the collapse in oil isn't finished, in which the West Texas Intermediate could fall into the 20s. I base that speculation on the fact that we're running out of storage space due to the excessive amounts hitting the market.

As of now I'm steering clear of the I-Fund. However, if oil rebounds, the I-Fund may be our best option.

Attached are a couple of weekly charts showing what I'm talking about.
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Relevant
Posts: 505
Joined: Thu Apr 26, 2012 1:01 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by Relevant »

Actually I think you will find a tighter correlation with "UUP" (U.S. Dollar)

The German, French, British, & Japanese markets are doing better than the S&P in Euro, #, and Yen terms but the rising dollar is counteracting the gains EFA would otherwise post. If the dollar reverses course and European stocks stay strong the I-Fund will charge higher.

dcramer29
Posts: 327
Joined: Thu Jan 12, 2012 10:56 am

Re: Collapse in Oil Hurting the I-Fund ?

Post by dcramer29 »

Relavant - agree...I-Fund could see a moonshot if the oil trends higher or dollar breaks lower.

Unless we have a crash in equities :)

crondanet5
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Joined: Tue Aug 19, 2008 8:51 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by crondanet5 »

I'm not sure oil price is affecting the I Fund. Petroleum products have a lot of taxes attached to them in Europe so oil's drop in price has not affected them that much. The problem is the strong dollar. Chart yourself a picture of the strong dollar to the I Fund over 5 years. You could also click on the I Fund chart below and select a year or more time frame. It was obvious the I Fund was ready to drop regardless of what news event the Wall Street talking heads chose to blame. Now the question is how high will the S Fund rise before it too takes a dive?

rlinehan
Posts: 96
Joined: Tue Jul 23, 2013 7:37 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by rlinehan »

Wow!

Lots ‘o confusion here!

“Europe.”

The I Fund is NOT about Europe AT ALL but rather stock markets in the “Developed World,” ex-US and Canada.

Of these markets, Japan constitutes 21.6%, and three companies in Australia alone represent 2.2%, totaling at least 23.8%

Then there’s “Eurozone.”

The UK (20.7%) and Switzerland (9.2%), total 29.9%, are not members thereof.

Only France (9.8%) and Germany (9.3%), total 19.1% percent, ARE.

The rest of the constituents, 29.3%, are “other.”

Therefore, at least 23.8% of the index on which the I Fund is based is NOT Europe AT ALL.

And at least 53.7% thereof is NOT Eurozone.

“I'm speculating that the collapse in oil isn't finished, in which the West Texas Intermediate could fall into the 20s.”

No way:

http://www.investingdaily.com/22079/hav ... -bottom-2/


“I base that speculation on the fact that we're running out of storage space due to the excessive amounts hitting the market.”

Wrong again:

http://www.investingdaily.com/22312/don ... ool-aid-2/


“Since the oil collapse started last June, the EFA also started it's trend lower”

Wrong again, see chart: http://tspcenter.com/tspReturns.php

Oil price continued down for most of that time, whereas the EFA bobbed and weaved – as per GEOPOLITICAL events.

Ever heard of Ukraine and Greece? Nah, guess not.

But crondanet5 evidently did: “It was obvious the I Fund was ready to drop regardless of what news event the Wall Street talking heads chose to blame.”

Except: “The problem is the strong dollar. Chart yourself a picture of the strong dollar to the I Fund over 5 years.”

Indeed, the I Fund has risen as the dollar’s strengthened: Wrong again!

“Actually I think you will find a tighter correlation with ‘UUP’ (U.S. Dollar)

“The German, French, British, & Japanese markets are doing better than the S&P in Euro, #, and Yen terms but the rising dollar is counteracting the gains EFA would otherwise post. If the dollar reverses course and European stocks stay strong the I-Fund will charge higher.”

Wrong again: The rising dollar indeed counteracts the gains the EFA would otherwise post.

Except that the EFA wouldn’t EVEN make those gains, at least as much, as much of those gains are based PRECISELY on weak local currency vs. the dollar: Cheaper product prices, which makes those products more competitive vs dollar-produced counterparts and enhanced profits when receipts from those products are priced back to weaker local currency.

That is, in part, PRECISELY why the I Fund has RISEN this year by 7.24% -- even while the dollar has strengthened.

If the “dollar reverses course” (which it won’t in the near future), “European stocks [won’t] stay strong,” and the “I-Fund [most certainly will NOT] charge higher.”

Do NOT listen to Pied Pipers like “Relevant,” who CLEARLY has ZERO economic clue.

Given the choice of “Relevant” and the G Fund, take the latter, hands down.

Better yet, place some of your money in the I Fund, which is headed higher from here!

But you don’t have to take my word for it; try this:

http://www.eagledailyinvestor.com/17839 ... rope-bull/

This:

http://www.globalgurucapital.com/blog/2 ... rkets.html

AND this:

http://blogs.wsj.com/moneybeat/2015/03/ ... y-contest/

To name but a few.

Of course, if you prefer inferior returns, stick with the G, F, and C funds.

As the ancient Chinese phrase, from a story from the Legalist philosopher Han Feizi over 2000 years ago, puts it: 宋农观柱 (bumpkin of Song stares at stump):

http://ancientchinesestories.com/2008/1 ... his-stump/

Modern translation: “Past performance is no guarantee of future results.”

In other words, go for it, Stump Starer!

crondanet5
Posts: 4324
Joined: Tue Aug 19, 2008 8:51 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by crondanet5 »

Where did you get that 7.24% rise in the I Fund figure?

rlinehan
Posts: 96
Joined: Tue Jul 23, 2013 7:37 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by rlinehan »

Ever heard of tsp.gov?

The precise page is:

https://www.tsp.gov/investmentfunds/mon ... urns.shtml

Look down at the far right bottom, under 2015, YTD, I Fund, and you’ll see it, clear and simple: 7.24%.

rlinehan
Posts: 96
Joined: Tue Jul 23, 2013 7:37 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by rlinehan »

Oh, yeah, you can also go to http://finance.yahoo.com/

Enter "EFA" at the "enter symbol" box at the top left part of the page, and it will display "7.00%" for the YTD return (lower left of the data box) for that security.

Which, of course, is not precisely the I Fund in any way. But still close.

You can do the same thing at Google.com, MarketWatch.com, and www.reuters.com/finance/stocks.

You didn't know ANY of this?

Unbelievable!

You really should stay in the G Fund!

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Robvegas
Posts: 69
Joined: Sat Apr 06, 2013 9:40 am

Re: Collapse in Oil Hurting the I-Fund ?

Post by Robvegas »

As of today, March 12, 2015, 7.24% YTD is inaccurate. The 2015 HIGH (Feb 27, 2015) is 7.24%. Since March isn't complete that chart stops after the last trading day of February.

crondanet5
Posts: 4324
Joined: Tue Aug 19, 2008 8:51 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by crondanet5 »

rlinehan you could be right. I may have made a mistake moving into the S Fund. Are you in the G?

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Robvegas
Posts: 69
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Re: Collapse in Oil Hurting the I-Fund ?

Post by Robvegas »

This is a link I got from Tom at TSP talk to follow the I Fund daily share prices,

http://www.msci.com/products/indexes/si ... mance.html

You need to hit "I agree" to get the quotes.

I find the EAFE quote on this site works well, but there will always be times that it will be off because of the U.S. markets trading after these EAFE stocks are closed.

rlinehan
Posts: 96
Joined: Tue Jul 23, 2013 7:37 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by rlinehan »

One of the best features of this site, is its TSP Charts & Returns page (when it’s updated).

If you check the boxes for the G, F, C, S, and I Funds and choose 31 December 2014 as the start date and 12 March 2015 as the end date, the following returns are displayed:

G Fund: +0.37%
F Fund: +0.79%
C Fund: +0.81%
S Fund: +3.98%
I Fund: +3.79%

Even better, the accompanying chart clearly shows the relative performance of the funds over that time period.

And you can confirm those numbers from the Share Price History page of Tsp.gov:

F C S I Date
16.9336 27.3851 37.7424 25.1357 3/12/15
16.8017 27.1655 36.2964 24.2183 12/31/14
0.1319 0.2196 1.446 0.9174 Difference
0.00785 0.008084 0.039839 0.03788 Performance
0.78504 0.808378 3.983866 3.788045 X 100

As the accompanying chart clearly shows, there has been a big market decline the past two weeks, with the I Fund taking the biggest hit.

Even so, it has vastly outperformed the C Fund (4.7-fold) since the beginning of the year (actually even more so since mid-December – check the chart).

And the S Fund has done even better.

But if you don’t know how and where to find such data, you’re better off in the G Fund.

The other funds are Dangerous – and can fall 20% or more at the drop of a (central banker’s, Greek politician’s, or Russian dictator’s) hat.

crondanet5
Posts: 4324
Joined: Tue Aug 19, 2008 8:51 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by crondanet5 »

Good post. I gave you reputation points for a position well presented. :D

rlinehan
Posts: 96
Joined: Tue Jul 23, 2013 7:37 pm

Re: Collapse in Oil Hurting the I-Fund ?

Post by rlinehan »

Thank you, Sir!

Lipper Fund Flow Data for the week ending Wednesday were released yesterday:

“Stock funds attracted just under $1 billion to mark their fifth straight week of inflows. All of the cash, at $5.5 billion, went toward funds that specialize in stocks outside the United States, while U.S.-focused stock funds posted their biggest outflows since early February, at $4.5 billion.

“The cash also went toward stock mutual funds, which attracted $1.7 billion, while stock ETFs posted $703 million in outflows.

“Mutual funds are commonly purchased by retail investors, which [sic, “while”] ETFs are thought to represent the institutional investor.

“’The retail crowd wasn't intimidated - it was really the institutional crowd that was getting skittish,’ said Jeff Tjornehoj, head of Americas research at Lipper, in reference to fears of a June rate hike. ‘The ETF outflows reflect the sentiment of investors capable of quick decisions.’”

http://www.reuters.com/article/2015/03/ ... TI20150312

But, hey, look how far stock (and bond) prices have fallen the past two weeks, especially the I Fund!

F Fund: -0.46
C Fund: -2.15%
S Fund: -0.60%
I Fund: -3.09%

The G Fund, by contrast, was up a warm and fuzzy 0.07% during that time period.

Those Big, Bad Institutional Investors can’t wipe out that fund in a nanosecond!

User avatar
RGEN
Posts: 228
Joined: Sun Jan 27, 2013 12:12 am

Re: Collapse in Oil Hurting the I-Fund ?

Post by RGEN »

Rline,
Thanks for the input. Well informed.
How's your fantasy account coming along?
RGEN

Post Reply

Fund Prices2022-08-17

FundPriceDayYTD
G $17.00 0.01% 1.55%
F $19.02 -0.54% -8.94%
C $65.15 -0.71% -9.44%
S $69.92 -1.76% -16.21%
I $33.69 -0.76% -14.58%
L2065 $13.09 -0.87% -12.03%
L2060 $13.09 -0.87% -12.03%
L2055 $13.09 -0.87% -12.02%
L2050 $26.93 -0.76% -10.29%
L2045 $12.36 -0.71% -9.60%
L2040 $45.40 -0.66% -8.84%
L2035 $12.07 -0.61% -8.00%
L2030 $40.47 -0.55% -7.11%
L2025 $11.66 -0.38% -4.78%
Linc $22.99 -0.23% -2.10%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".