Dollar gains: getting a chub chub

N

newkie1

Guest
Is it wrong to be this excited by money?

"Even now the current valuation doesn't reflect the fundamentals, so we would anticipate a further fall down towards the $1.10 level. All our technical indicators bar one have signalled a turn in momentum and a turn in the trend."

[broken link removed]

Thoughts? We're at the cusp of converting half our wealth to euros next week. Should I hold out?
 
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nobody can predict fx movements. Take your chances.

Or if you don't want to take chances , convert your money as and when you need it.
 
Re: .

you need to accept that you can't predict fx movements,
despite what any analysis says. the only intelligent
decision you can make is how much volatility you are
willing to accept.

for example, you could convert it all now (or at some point
in the future). a month later the dollar could have gained
20% and you'd feel like a chump. on the other hand the
dollar could fall 20% in the same period and you might start
feeling smug. given that you do not have ability to make
an intelligent decision one way or the other, neither outcome
is within your power to influence. what i would suggest is
that you convert your money in smaller batches over a longer
period; for example, convert a twelfth of it every two months.
this way, you're not at the mercy of the wild swings in the
market. you need to factor in trading costs into your
calculations when designing a strategy like this.

yes, it's exciting to watch the value of your weath fluctuate
with market movements and follow the "analysists" opinions,
etc. but don't get carried away; unless you're completely
unique (the reason george soros is famous), you have no
chance of outguessing this market.
 
Re: .

Well the one thing the last few days of learning has taught me, and believe me the currency market is a whole new world for me, is that just like in politics, stocks, and movie reviews everyone seems to have a different opinion about the euro and where its going. All I have surmised from this is that the bulk of analyists say the euro is still headed to 1.40 by '05.

I found this to be an interesting article: story.news.yahoo.com/news...kingdollar

You can really see how people with a lot to lose would follow politics and economies closely. To see the a president offer a tax cut which increases the deficit which devalues the dollar. To see nations allow inflation to reduce their debts. To read why the central banks have been propping up an overvalued dollar for years. My interest in this goes only as far as moving my money over, but its been a eye-opening look at the financial world.

You guys are right, there is no way to predict anything. But these swings of a few pennies are costing me thousands! The currency market is certainly more jittery than stocks. So one way of the other, even though its certainly not as good as just a few months ago I think I'm ready to take the risk. So I think I'm moving 50% now and 50% in 2 years. Perhaps it is wiser to move it over 10% at a time and take the mean rate between now and 2 years from now. But somehow my gut tells me things are only going to get worse for the dollar and than moving over 50% is the right thing to do. But then what do I know, I've only been following this for a few weeks! "Yes... no... maybe... I don't know," pretty much sums it up. I hate to be a stupid ignoramus at the cost of my family's future, but I've learnt from stocks that yesterday's price doesn't matter.
 
Re: .

I read something recently that whatever marginal success the mathematical models they use for the stock markets have in predicting market dynamics, the equivalent models for the currency markets are considered completely useless...
 
Re: .

Take a look at the econimists big mac / Starbucks to see whether the dollar is undervalued in the long term. This measure is lighthearted and not scientific, but does tend to give some indication, I've been told.

I also don't like making short term predictions, but I believe a study of the fundamentals can give one an educated view of what the long term picture holds.
 
Big mac index

Thanks 0

Looks like the dollar was overvalued when stronger than the Euro, but undervalued now. There you have it!
 
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