Why Forex and Alternative Investments?
“Characteristically speaking, an Alternative Investment is a broad investment category comprised of non-traditional investments such as stocks and bonds”.
Alternative Investments can include futures & options (derivatives), forex, real estate, private purchase programs, as well as hedge fund investments and private equity investments – many using sophisticated, diversified strategies, and usually are considered riskier than traditional investments. As a general rule, many people believe that no more than 10-20% of one’s liquid net-worth should be allocated to alternative investments. We believe when properly structured, these investments can be quite attractive and although still considered high risk when compared to a typical “run-of-the-mill” investment, they should not necessarily all be treated equally in terms of risk, as there can be quite a variance from one program to another.
One of the largest advantages of many Alternative Investments is in their ability to profit in virtually ANY economic environment. Time after time, the successful growth of this investment class thrives regardless of conditions such as a strong economy, low inflation, high interest rates, or a depressed stock market. The success of these investments typically depends on performance, as well as the risk and diversification used. Investors adding this asset class to their portfolio can help reduce volatility, minimize risk, and possibly increase the risk versus return ratio of their overall portfolio. Because of this, it is no surprise that alternative investments have increased dramatically in popularity over the past 10 years as investors search for alternatives to traditional markets. It is more common now to see these types of investments used in typical portfolio management strategies.
Some of the key advantages which are specific to the Forex Alternative Investment asset class include the following…
- Trade Forex 24 Hours A Day, 5 Days A Week: As the Forex market is global, the different time zones ensure that the market never closes.
- High Liquidity: With the average daily turnover close to USD 4.2 trillion (April 2012), forex is the most liquid market in the world.
- Trade Forex To Benefit From Rising And Falling Markets
- Margin trading: leverage can be applied to your investments.
- Trade across a full range of major and minor currency pairs.
- Low Bid/Ask spreads.
- Instant trading: Forex trading offers a rapid pricing and trading capacity due to the size and liquidity in the market.
- Portfolio hedging: Forex positions can be used to hedge currency fluctuation risks.
- Financial instruments unrelated to bear/bull trends in equity investments.
No other market brings together so many favorable conditions for getting started and making money. Just remember that if you can make money in Forex, you can also lose money. So make the most of the opportunities on offer by doing the right preparation and trading sensibly and responsibly.