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If your objective is to make money trading dollar denominated foreign mutual
funds, then your return on those investments will have two components,
first, the change in value of those funds when expressed in foreign
currency, and second, the change of that value when converted to domestic
currency. TA of the dollar denominated foreign mutual funds will reflect
the combined effect of those two components, and if trading dollar
denominated foreign mutual funds is all one wishes to do, TA is appropriate.
The point which I was trying to make is that if a foreign market is rising
at 10% per time period, and the foreign currency relative to the domestic
currency is falling at the same rate, the rate of return from a domestic
currency denominated foreign mutual fund will not mirror the foreign market
alone. In other words, even though both of the underlying components are
trending, albeit in opposite directions, the domestic currency denominated
foreign mutual fund may not.
-----Original Message-----
From: HARELSDB@xxxxxxx <HARELSDB@xxxxxxx>
To: tpylypuk@xxxxxxxxxxx <tpylypuk@xxxxxxxxxxx>; realtraders@xxxxxxxxxxxxxx
<realtraders@xxxxxxxxxxxxxx>
Date: March 29, 1999 12:40 AM
Subject: Re: MKT Japan
>In a message dated 3/28/1999 11:34:53 AM Mountain Standard Time,
>tpylypuk@xxxxxxxxxxx writes:
>
><< Of course you can use TA to make trading decisions without accounting
for
> currency fluctuations, but in that case you will be effectively charting
or
> trading mutual funds and currencies at the same time and without being
able
> to isolate the one from the other.
> >>
>What benefit would be gained by isolating currency effects from the mutual
>fund if your objective is to make money trading the dollar denominated
mutual
>fund?
>
>Dan
>Pocatello, ID usa
>
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