Everywhere you turn there are signs showing the dollar is going down in value. Products our stronger dollar could buy much cheaper are now costing much more. It takes a few more of our greenbacks to buy that same lead painted toy from China, or that barrel of thick goo that we put in our imported cars from Japan as we fill up our tanks and nearly choke on our $4 lattes.
Since our country is no longer able to make decent products anymore, we have no choice but to import them from somewhere. While other economies are flourishing from our purchases they still have to convert our dollars to a local currency.
That being said, most people are suffering from higher priced products yet the rich just keep getting richer. As market conditions change so does the rich investment strategy.
The average person has one investment strategy: invest, hold and pray. The rich see every market change as the time to change investment strategy. When they see oil prices going up, they invest in oil stock; when the dollar drops they buy into the Euro or another currency.
For example: In February 2006 the Euro/Dollar (EUR/USD) was around 1.2400; as of January 2008 it sits around 1.4800. For someone with a standard account with $20,000 invested, a single standard lot of $1,000 in a trade (or 5% of their account margin) with a 100:1 leverage would have made $24,000 in profit, boosting their total account value to $44,000.
A little over 100% return in just 2 years isn't too bad for a single trade. The people with a Certificate of Deposit only earned around 5%, not to mention the high number of folks with mutual funds who took a loss. I wonder how many people lost 15%-25% of their mutual funds. On another note, the higher oil prices go, the farther the dollar sinks against the Canadian dollar. The lower oil prices go, the more the dollar gains on the Canadian dollar. On extreme days I have seen the USD/CAD move by 300 pips in a 24 hour period. That means a 15-30% return in a single day.
To answer the question of what to do with a falling dollar, simply trade against it. Take the time to learn the Forex market because you will lose money as quickly as you make money if you don't.
Friday, January 11, 2008
Tuesday, December 11, 2007
Dumbing Down America
Over the last several years main stream media has been fooling Americans into believing investments like CD's, money market accounts and 401ks are the best they could ever hope for. They have convinced people that a 5% CD or a 12% mutual fund is the best percentage rate available. Every once in a while the media runs a story about a "lucky" or "genius" investor who made a fortune with commodities, currency, or stocks and bonds. The media wants you to believe those people were special.
Guess what? Most of those people are just like you and I. Average, ordinary people who believed they could make more and became a student of the markets. What's more is there are countless individuals making huge profits trading the markets. Most of these people have little or no college education; they just studied the market they traded.
By attending trading events throughout the country I've met an astounding amount of people who have made over 100% a year and many that have even made 1,000% a year. I've even met a trader who made over 25,000% in three years.
Yet the media never talks about the high number of successful traders; they choose to focus you in on just the unsuccessful traders.
The successful ones are always "lucky" or "genius", suggesting profit in the markets is near impossible for the average Jane and the average Joe.
So, what about hedge funds and mutual funds?
The SEC has made it illegal for a hedge fund to speak about their fund to anyone who is not an accredited investor. So, all the media ever talks about is the small figure of hedge funds that lose money overall. This only keeps investors in the dark, unable to scope both sides of the story. In reality only five percent of hedge funds lose money, meanwhile over 40% of mutual funds lose money.
Mutual funds have only one direction they can trade the market: up. Hedge funds on the other hand can profit from the market moving down or upward. The media makes people believe the market is a scary place. What an eye-opener it was for me to find out the real success people have had with trading.
The Forex Markets
Europeans have been trading currency for over 200 years. Yet America was just deregulated in 1997 for speculators despite the fact that American banks have been trading currency in since the 1970's.
Did you know countless Fortune 500 companies make more money in Forex than the business that made them household names? Take a look at the financial statements available on their websites. Why is trading currency good enough for them but not for the "average" people like you and I? Because it cuts into their pocketbooks.
If you knew where to get 5% every month instead of 5% every year, do you think you would put your money with them? No, of course not!
You as an individual have the ability right now to make 5% profit every month in the market. You have to take the time to learn how and which markets the biggest profits are in. It takes time to learn but it's worth it. If you're unable or unwilling to spend the time to invest in your knowledge then investing mainstream is your best option.
I think it's safe to say most of you are like myself. Why invest your money gaining 5% annually when much better is readily available?
Guess what? Most of those people are just like you and I. Average, ordinary people who believed they could make more and became a student of the markets. What's more is there are countless individuals making huge profits trading the markets. Most of these people have little or no college education; they just studied the market they traded.
By attending trading events throughout the country I've met an astounding amount of people who have made over 100% a year and many that have even made 1,000% a year. I've even met a trader who made over 25,000% in three years.
Yet the media never talks about the high number of successful traders; they choose to focus you in on just the unsuccessful traders.
The successful ones are always "lucky" or "genius", suggesting profit in the markets is near impossible for the average Jane and the average Joe.
So, what about hedge funds and mutual funds?
The SEC has made it illegal for a hedge fund to speak about their fund to anyone who is not an accredited investor. So, all the media ever talks about is the small figure of hedge funds that lose money overall. This only keeps investors in the dark, unable to scope both sides of the story. In reality only five percent of hedge funds lose money, meanwhile over 40% of mutual funds lose money.
Mutual funds have only one direction they can trade the market: up. Hedge funds on the other hand can profit from the market moving down or upward. The media makes people believe the market is a scary place. What an eye-opener it was for me to find out the real success people have had with trading.
The Forex Markets
Europeans have been trading currency for over 200 years. Yet America was just deregulated in 1997 for speculators despite the fact that American banks have been trading currency in since the 1970's.
Did you know countless Fortune 500 companies make more money in Forex than the business that made them household names? Take a look at the financial statements available on their websites. Why is trading currency good enough for them but not for the "average" people like you and I? Because it cuts into their pocketbooks.
If you knew where to get 5% every month instead of 5% every year, do you think you would put your money with them? No, of course not!
You as an individual have the ability right now to make 5% profit every month in the market. You have to take the time to learn how and which markets the biggest profits are in. It takes time to learn but it's worth it. If you're unable or unwilling to spend the time to invest in your knowledge then investing mainstream is your best option.
I think it's safe to say most of you are like myself. Why invest your money gaining 5% annually when much better is readily available?
Friday, November 30, 2007
Forex 101 Simplified
The foreign exchange, also known as "Forex", "FX", or "4X", market is the place where currencies are traded. The Forex market is the largest, most liquid market in the world. With an average of $2.3 trillion traded per day, it includes all of the world's currencies. Since there is not a central market place for currency exchange, trade is conducted over-the-counter.
The Forex market is open 24 hours a day, five and a half days a week with currencies being traded worldwide in New York, London, Tokyo, Zurich, Frankfurt, Paris and Hong Kong, among many more major financial districts.
The Forex market was once exclusive to government central banks and large commercial and investment firms. In 1997 it was deregulated, opening the doors for money brokers, registered dealers and speculators.
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