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Euro vs Contrafund, or how to buy a glider (affordably)
On Nov. 15, 2004 I posted a message suggesting that you invest your
money in a mutual fund with an excellent track record (i.e. Fidelity Contrafund) and wait until your $70K initial investment grows to match the current price of the glider. Here is an update on that strategy: Euro: $1.2944 (11/15/04) $1.3165 (3/20/05) 1.7% FCNTX: $54.79 (11/15/04) $57.19 (3/20/05) 4.4% Contrafund has out paced the Euro by a factor of over 2.5. So far the strategy is working. Tom Seim Richland, WA |
#2
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snip..
Euro: $1.2944 (11/15/04) $1.3165 (3/20/05) 1.7% FCNTX: $54.79 (11/15/04) $57.19 (3/20/05) 4.4% Contrafund has out paced the Euro by a factor of over 2.5. So far the strategy is working. With the Euro predicted to rise back to 1.35 in the next six months to a year (which is pretty much where it was just a few days ago) and a historic annual return of FCNTX of 1.75%, I'm not so sure of the return provided by your strategy, especially after taking into account buying, selling and admin fees for the account. These could easily eat up the 2.5% or so you are winning at the moment. Still, being ahead is always good! Report back in six months. Mike ASW 20 WA |
#3
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Mike the Strike wrote: snip.. Euro: $1.2944 (11/15/04) $1.3165 (3/20/05) 1.7% FCNTX: $54.79 (11/15/04) $57.19 (3/20/05) 4.4% Contrafund has out paced the Euro by a factor of over 2.5. So far the strategy is working. With the Euro predicted to rise back to 1.35 in the next six months to a year (which is pretty much where it was just a few days ago) and a historic annual return of FCNTX of 1.75%, I'm not so sure of the return provided by your strategy, especially after taking into account buying, selling and admin fees for the account. These could easily eat up the 2.5% or so you are winning at the moment. Still, being ahead is always good! Report back in six months. Mike ASW 20 WA The Contrafund is no-load and the rate of return includes all admin fees, so this is a real rate of return (unless you trade in less than 90 days from purchase). Predicting future exchange rates accurately will make you a multi-millionaire, eliminating the need for this strategy altogether. Tom |
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