How To Invest In Foreign Currencies
As recession takes hold of our economy, investing money wisely has become a challenge. With unemployment rate rising, we can also see an increase in alternative source of income for many laid off workers. Since finding a new job is like finding a needle in a haystack, those who have saved up for the rainy days are resorting to finding viable ways to earn money from their savings. Many are going into online business or cyber entrepreneurship; but success in this arena for those who have clear online channels and are vent tostrategized according to the best online practices.
The question is what are the other options in investing our money during recession.
With a major downturn in the US economy, one of the ways to hedge against the declining dollar was investing in foreign currencies. Of all the people I have advised on this investment type, many are wary of the method and facilities for Foreign Excchange Trading. A few were concerned that they would have to travel overseas and open a foreign bank account. Luckily, it isn’t so difficult.
Forex is a common abbreviation of Foreign Exchange (also referred to as FX) and it is today the largest financial market in the world, with a turnover of over $3 trillion a day. Speculators in the Forex market trade one currency for another and make a profit off of this transaction. The Forex market appeals to a wide range of financial traders because the market is open 24 hours a day, five days a week, and because the relatively limited amount of currencies makes it possible for even the most novice trader to grasp market fluctuations. The Forex market is based in four major cities: New York, London, Sydney, and Tokyo.
These are the foreign exchange investment options that I can think of.
1. Buy Currencyshares ETFs. You can choose between several currencies like Australian Dollar (Ticker: FXA), Swiss Franc (Ticker: FXF), Japanese Yen (Ticker: FXY), Euro (Ticker: FXE), etc. If you have a brokerage account, its as easy as buying stock. This is probably the easiest method. They also pay monthly dividends and are quite similar to buying a foreign currency CD.
2. Open on account with your local bank (like Everbank) accepting investment in their foreign currencies CDs or directly open an account in a foreign currency.
3. Open on account with Interactive Brokers and directly buy foreign currency (this is probably the most hassle so you’re better off sticking with the top 2 methods).
4. Participate in Online Forex Trading. There are a number of online currency platform that you can use nowadays: eToro, iForex, FxCM and many more.
I would personally recommend the online forex trading. I have been using the eToro platform which actually suits my own needs at this time. (I would appreaciate if those using other platforms can reply here and give their reviews of these platforms). The good thing about the eToro online forex trading is that you can practice the actual trading without spending any money. Basically, you can sharpen your trading abilities by trading virtual money with real market rates. Admittedly, it was on this platform that I have learned and developed my trading skills.
If you have the discipline and resources, go ahead check out this type of investment. You can actually start your investment at $50. Just be sure you practice first with virtual money and understand the whole process before investing your hard earned money. With recession looming, smart investing is the key to shaking out from the income slack.
Comments (1)
IMF (Visitor) said:
26 April 2009
Post a comment