Would every FX currency pair or public stock that is under the 30 level using Relative Strength Index (RSI) be an undervalued pair?
No, and using a 37 year old formula in finance that is as simple as: should make it obvious technical analysis is more of a game for retail traders than investment advice. When it comes to currencies, there are a myriad of macroeconomic occurrences that do not follow a predictable timescale. Using indicators like RSI on any time frame will not magically illuminate broad human psychology and give you an edge. It is theoretically possible for a single public stock's price to be driven by a range of technical traders who all buy at RSI 30 and sell at RSI 70, after becoming a favorite stock on social media, but it is infinitely more likely for all market participants to have completely different goals. No. The long-term valuation of currencies has to do with Purchasing Power Parity.  The long-term valuation of stocks has to do with revenues, expenses, market sizes, growth rates, and interest rates. In the short term, currency and stock prices change for many reasons, including interest rate changes, demand for goods and services, asset price changes, political fears, and momentum investing.  In any given time window, a currency or stock might be: The Relative Strength Index tries to say whether a currency or stock has recently been rising or falling; it does not inherently say anything about whether the current value is high or low.
Why don't you look at the actual funds and etfs in question rather than seeking a general conclusion about all pairs of funds and etfs?  For example, Vanguard's total stock market index fund (VTSAX) and ETF (VTI).  Comparing the two on yahoo finance I find no difference over the last 5 years visually.  For a different pair of funds you may find something very slightly different.   In many cases the index fund and ETF will not have the same benchmark and fees so comparisons get a little more cloudy.  I recall a while ago there was an article that was pointing out that at the time emerging market ETF's had higher fees than corresponding index funds.  For this reason I think you should examine your question on a case-by-case basis.  Index fund and ETF returns are all publicly available so you don't have to guess. "Kid, you need to start thinking in thresholds. There are several monetary thresholds that separate your class from a more well funded class. 1) You cannot use margin with less than $2000 dollars Brokers require that you have at least $2000 before they will lend to you 2) In 2010, Congress banned under 21 year olds from getting access to credit. UNLESS they get cosigned. This means that even if you have $2000, no broker will give you margin unless you have a (good) credit history already. There was a good reason for this, but its based on the assumption that everyone is stupid, not the assumption that some people are objective thinkers. 3) The brokers that will open an account for you have high commissions. The commissions are so high that it will destroy any capital gains you may make with your $1000. For the most part. 4) The pattern day trader rule. You cannot employ sophisticated risk management while being subject to the pattern day trader rule. It basically limits you from trading 3 times a day (its more complicated than that read it yourself) if you have less than $25,000 in one account. 5) Non-trade or stock related investments: Buy municipal or treasury bonds. They will give you more than a savings account would, and municipals are tax free. This isn't exactly what I would call liquid though - ie. if you wanted to access your money to invest in something else on a whim. 6) What are you studying? If its anything technical then you might get a good idea that you could risk your money on to create value. But I would stick to high growth stocks before blowing your $1000 on an idea. Thats not exactly what I would call ""access to capital"". 7) Arbitrage. Lets say you know a friend that buys the trendy collectors shoes at discount and sells them for a profit. He might do this with one $200 pair of tennis shoes, and then use the $60 profit different to go buy video games for himself. If he wanted to scale up, he couldn't because he never has more than $200 to play with. In comparison, you could do 5 pairs ($200 x 5) and immediately have a larger operation than him, making a larger profit ($60 x 5 = $300, now you have $1300 and could do it again with 6 pairs to make an even great er profit) not because you are better or worked at it, but solely because you have more capital to start with. Keep an eye out for arbitrage opportunities, usually there is a good reason they exist if you notice it: the market is too small and illiquid to scale up with, or the entire market will be saturated the next day. (Efficient Market Theory, learn about it) 8) Take everything I just taught you, and make a ""small investor newsletter"" website with subscribers. Online sites have low overhead costs." "**Yup!**  It's important to note that modern soft contact lenses let through 10 times as much oxygen as the original hard contacts that were in use 20 years ago.  The company you referenced, that's actually owned/run by the original inventor of soft contact daily lenses.  He started it up because he was outraged at the prices being charged by the big name vendors who had licensed his patent.  His story is here:  http://www.daysoftcontactlenses.com/GB/All-about-Daysoft.aspx  Two important things about re-using dailies.  **1)** Don't leave dailies in overnight, buy solution and take them out and wash them each night.  It really makes a difference in terms of complication rates.  You don't have to fill the contact holders up to the top, not even to the ""internal line"", but make sure the contacts are covered.  The latter will save you half on solution.  When I'm on a wilderness trip I will wear my contacts through every other night, because trying to wash my hands completely and the sanitary conditions... well it's just less risk and trouble imho than handling my contacts with potentially not-quite-perfectly-clean hands.  **2)** Don't use a single pair more than 2 or 3 weeks.  The risk of infections and complications gets too high using a single pair of general soft contacts around the one month mark.  This is my recollection of what a medical doctor at an ER near a University posted online 10 years ago.  You see university kids are far more likely/prone to over-use a pair, and he found that all the kids coming to his nearby ER with eye infections - had worn soft contacts for one month or more.  ALSO -- if you're taking them out at night and using solution (as I strongly recommend you do), at the two week part the cost of daily contacts matches the cost of the solution you are using.  So wearing a pair any longer than 2 weeks doesn't actually save you much more money." Gold is traded on the London stock exchange (LSE) and the New York stock exchange (NYSE) under various separate asset tickers, mainly denominated in sterling and US dollars respectively.  These stocks will reflect FX changes very quickly.  If you sold LSE gold and foreign exchanged your sterling to dollars to buy NYSE gold you would almost certainly lose on the spreads upon selling, FX'ing and re-buying. In short, the same asset doesn't exist in multiple currencies.  It may have the same International Securities Identification Number (ISIN), but it can trade with different Stock Exchange Daily Official List (SEDOL) identifiers, reflecting different currencies and/or exchanges, each carrying a different price at any one time. "You could not have two stocks both at $40, both with P/E 2, but one an EPS of $5 and the other $10.  EPS = Earnings Per Share P/E = Price per share/Earnings Per Share So, in your example, the stock with EPS of $5 has a P/E of 8, and the stock with an EPS of $10 has a P/E of 4.  So no, it's not valid way of looking at things, because your understanding of EPS and P/E is incorrect. Update: Ok, with that fixed, I think I understand your question better. This isn't a valid way of looking at P/E. You nailed one problem yourself at the end of the post: The tricky part is that you have to assume certain values remain   constant, I suppose But besides that, it still doesn't work. It seems to make sense in the context of investor psychology: if a stock is ""supposed to"" trade at a low P/E, like a utility, that it would stay at that low P/E, and thus a $1 worth of EPS increase would result in lower $$ price increase than a stock that was ""supposed to"" have a high P/E. And that would be true. But let's game it out: Scenario Say you have two stocks, ABC and XYZ. Both have $5 EPS. ABC is a utility, so it has a low P/E of 5, and thus trades at $25/share. XYZ is a high flying tech company, so it has a P/E of 10, thus trading at $50/share. If both companies increase their EPS by $1, to $6, and the P/Es remain the same, that means company ABC rises to $30, and company XYZ rises to $60. Hey! One went up $5, and the other $10, twice as much! That means XYZ was the better investment, right? Nope. You see, shares are not tokens, and you don't get an identical, arbitrary number of them. You make an investment, and that's in dollars. So, say you'd invested $1,000 in each. $1,000 in ABC buys you 40 shares. $1,000 in XYZ buys you 20 shares. Their EPS adds that buck, the shares rise to maintain P/E, and you have: ABC: $6 EPS at P/E 5 = $30/share. Position value = 40 shares x $30/share = $1,200 XYZ: $6 EPS at P/E 10 = $60/share. Position value = 20 shares x $60/share = $1,200 They both make you the exact same 20% profit. It makes sense when you think about it this way: a 20% increase in EPS is going to give you a 20% increase in price if the P/E is to remain constant. It doesn't matter what the dollar amount of the EPS or the share price is." "Not necessarily. Shorting XOM is saying that EM (china + india) are going to have a ""slowdown"" (not neg growth but slower) and that US is going to pick up a lot slower.  Selling JNJ means the manager is overall bearish but doesn't have that much conviction (otherwise he would sell XOM or SPY), but still wants that negative exposure.  Personally, both are just plays on SPY with increased risk (XOM) or decreased risk (JNJ)." This is called currency speculation, and it's one of the more risky forms of investing.  Unless you have a crystal ball that tells you the Euro will move up (or down) relative to the Dollar, it's purely speculation, even if it seems like it's on an upswing.  You have to remember that the people who are speculating (professionally) on currency are the reason that the amount changed, and it's because something caused them to believe the correct value is the current one - not another value in one direction or the other. This is not to say people don't make money on currency speculation; but unless you're a professional investor, who has a very good understanding of why currencies move one way or the other, or know someone who is (and gives free advice!), it's not a particularly good idea to engage in it - while stock trading is typically win-win, currency speculation is always zero-sum. That said, you could hedge your funds at this point (or any other) by keeping some money in both accounts - that is often safer than having all in one or the other, as you will tend to break even when one falls against the other, and not suffer significant losses if one or the other has a major downturn. You have currency risk either way.  The only question is deal with it now or later.  No one can tell you which action is better until we look at it in hindsight.  You could hedge and move some now, some later.  Invest your USD in US equities and move some to EUR and invest that in EUR companies. I'd suggest having your money in the same currency as where you are living, since for the most part, you'll be in the same boat as your peers and neighbors.  If you have high inflation, so will your friends and neighbors and you won't feel so bad.  And if your currency gets stronger, then so will the currency of the people you are hanging out with. It's similar to betting on Don't Pass in craps.  If you bet against the rest of the table, you could win when they lose, but then all your friends will be sad and you'll be happy. And vice versa, when your friends are high-fiving, you'll be in the dumps. I'd say it's better to be in the same boat as your peers since that's usually how we judge our happiness when we compare our situation to others.