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“Don’t put all your eggs in one basket” is a well-known proverb in the Financial Market which means
that you should not invest all your money in the same place. Your portfolio should be a mix of Stocks, Bonds, Commodities, Forex etc.
Forex Exchange can be made part of your investment portfolio which can not only contribute in better growth but also hedge other asset classes many a times.
Reasons to Invest in Forex:
- It provides opportunity to diversify your investment portfolio. One difference between stocks and currencies is that stocks move independently of each other while currencies move relative to each other. With currencies, when one is rising, another must be falling.
- Forex market works 24×7, so you get the time flexibility to trade. Unlike stocks, the news that drives currency prices is available to everyone on a real-time basis. In theory, there are no “insiders” in the foreign exchange market which operates 24 hours a day around the world. Since currency valuations are driven by actual monetary flows and events that influence a country’s economic health, you can do your own analysis of how these events might impact its currency.
- Capital appreciation is one of the key features of Forex. Currencies are akin to commodities and stocks because they offer the potential for capital appreciation. If the value of your currencies rises against the dollar, you will profit.
- It provides you liquidity of funds
- Forex is not dominated by a single market exchange i.e. it works globally
- Fores can be used for hedging against Political and even risk in capital market. Currencies can be played against each other based on your tactical assessment of important events going on around the world. Examples are changes in top leadership, interest rate fluctuations, currency revaluations, wars, political upheavals, trading sanctions, new tariffs, monetary policy changes, trade deficits, recessions, tax changes, import restrictions and health-related epidemics.
- The Forex market works at 2 levels i.e. Online and Over the Counter. That provides easy availability and convertibility.
These are just a few advantages of investing in the Forex Market. However, the Forex Market investing also requires you to be cautious because you can lose money quickly if you are not trained and Forex trading is not done in the right way.
Some Caution Tips:
- Get trained for Forex Trading and Investing.
- Start will small amounts until you understand the Forex Market completely
- Quick decision making is the core skill required to trade in Forex
- Research about the Forex broker before handing your money for trading
- Keep a tab of the economic condition of the country for the currency you are
trading in. - Beware of Scams and do not trade currencies or illegal instruments
The Forex Market trading works just like the Airplane Ticket Prices. They are very dynamic and keep
moving up and down at quick pace. To make the best use of the Forex Trading you should
- Take help from a good Financial Advisor and mentor
- Keep Learning about the Forex Market on a daily basis
- Don’t give up quickly if you stumble upon hurdles
We provide you all the support you need with understanding the Forex Market i.e. Training and Tricks of the trade, Financial Advice and Handholding you through the process of Forex Trading. To know more you can contact us on www.prajinvestments.com.