So, if you think about it...a stronger dollar isn't necessarily a good thing for the domestic market. Cheaper oil should be a good thing for the domestic equity markets sans most energy companies. The reason being is that there IS an oversupply problem. There will have to be either a distinct rise in oil demand or a distinct reduction in oil supply.
With that said, being in domestic equities during QE periods has been a positive trade. Whether that translates to overseas markets should be considered as well as currency conditions. Which means even if QE is such a good thing for equities, EFA will not perform as well if the USD keeps strengthening. Which is why I don't play with EFA.
To prove my point, go to the website posted below and see the EAFE index priced in Euro's.
http://www.msci.com/products/indexes/co ... mance.html
The lesson, DON'T invest in EFA when the strength of the dollar increases. It negates any performance from any QE done overseas where EFA is invested in.
Oh, and to further clarify my opinions, the 5% mix of oil in the index isn't the main driver of performance for the EFA at this time. Neither is the QE going on. The main driver of performance for the EFA right now is the strengthening dollar in U.S. markets. It's different on overseas exchanges.
EDIT 1: "any performance" is a bit strong. However, a strengthening dollar in relation to weakening currencies of the countries where the aforementioned index has companies does have a significant dampening affect. This has been most pronounced of late since QE has gone in overdrive in Europe while the U.S. is winding down its QE programs.
EDIT 2: The reason why EFA has been up YTD is all in the currency. EURO and USD were both flat during the beginning of the year hence the very positive performance of EFA. Now, EFA is tanking because of a strengthening USD.
TSPsmart wrote:Crondanet5...Statistics are historically derived. I want to know what Fund to be in for Monday.
The one going up, Crondanet5, the one going up.
I'd suggest reading next Tuesday's newspaper.
That pretty much says it all.
“I don't play with EFA.”
That’s probably the best idea.
“The reason why EFA has been up YTD is all in the currency.”
No, it isn’t – read the links I provided above.
As for “fantasy account,” I notice that most of the last posts in this thread occurred Friday between 9:59 am and 4:44 pm. Aren’t you folks supposed to be working? Maybe Congress should know what’s going on in federal government agencies during work hours!
And fantasy, it seems, is what’s going on here in this thread – fanatasizing on the job, no less!
Someone else answered what TSP Fund to be in on Monday: The one that’s going up.
And that likely will be the ONE that was up Friday – AND beaten ALL the rest the last three weeks.
Better yet, try lead.
And that's not just impacting European markets (and the I Fund) but our own, as well.
Who knows what's going to happen Monday (or Tuesday, etc.)?