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Most people are familiar with stocks which have been central to many investment portfolios for many years now, but should you continue to hold stocks as an investment or move over to a portfolio of currencies?

Traditionally, companies have issued stock whenever they have needed to raise money and sold that stock on the open market giving buyers a stake and part ownership in the company. When the company does well stock holders benefit by receiving a share of the profits in the form on dividends which are paid out each year or twice yearly. In addition, stock holders can also benefit from the good fortunes of a company as the value of the company’s stock will also rise on the open market.

Stocks are traded freely through the world’s major stock exchanges with American stocks for example being traded on such exchanges as the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). In general most stocks will only be traded through a single exchange, but the stocks of major companies can be listed on several different exchanges.

The problem with stocks is that, while they are great as long as a company is doing well, you can run into problems if the company, its market sector or the market as a whole takes a downturn. In these circumstances you can find that your dividends fall as does the value of your stock on the open market and that, in order to recover your investment, you will need to wait until an upturn in the market. For this reason stocks are seen very much as a long term investment and you must be prepared to hang onto your stock for many years in some cases in order to see a good profit.

The Forex or foreign exchange market is however quite a different matter and is a market which has attracted a great deal of attention since it was opened up to the small investor some years ago.

While you can purchase and hold currencies for the longer term this is rarely done and most Forex trading is done on much smaller time frames than those seen in the stock markets. Indeed, many traders ‘day trade’ the market literally buying and selling on the same trading day and frequently holding currencies for only a matter of a few minutes or an hour or two. Day trading is not however not for the novice and requires considerable knowledge and experience of the market so that most novices will trade on slightly longer time frames.

The Forex is the world’s largest financial market and handles transactions worth trillions of dollars every day. To put this in perspective, the combined turnover of all of the American stock exchanges reaches a daily figure of only about one hundred billion dollars. This huge turnover on the Forex also means that it is the world’s most liquid market and so it is very easy to buy and sell with many more opportunities than are seen in the stock markets.

Another great benefit of the Forex however lies in the fact that there is no center for trading and trading takes place around the world. Also, because of the different time zones across the globe it is possible to trade literally 24 hours a day 7 days a week, unlike the stock exchanges which operate on fixed and very limited hours. As long as you have an Internet connection you can trade from the comfort of your own home at whatever time suits you.

Perhaps the greatest benefit of the Forex however is its predictability. Unlike stocks, currencies tend to follow very well established trends and, once you have learned to work with the many excellent predictive tools available, it is easier than you might think to follow the progress of many of the world’s major currencies.

There is no enormous investment required to enter the world of Forex trading and many online brokers will allow you to open a Forex trading account with as little as $250 and trade on leverage of 100:1, rather than the commonly available leverage of just 2:1 in stock trading. In other words, for your initial investment of $250 you can participate in trading lots of up to $25,000. This in itself is a very attractive reason for giving this exciting and lucrative form of investment a try.

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The Foreign Exchange Market, which is perhaps better known as the Forex, is a global market established for the purchase and sale of currencies. It effectively operates around the clock and daily transactions run into trillions of dollars, which in itself sets it apart from markets such as the US Treasury Bond market which sees daily transactions in the region of three hundred billion dollars and the combined American stock markets at about one hundred billion dollars a day.

The Forex as we know it today was created in 1971 when fixed currency exchanges were abolished and currencies were, and still are, valued at ‘floating’ rates which are determined by the law of supply and demand. This change, combined with technological advances during the 1980s, created substantial growth in the Forex market so that today it is the world’s largest financial market.

The Forex comprises a diverse group of some 5,000 trading institutions including international banks, central government banks, commercial companies and brokers. Unlike most other markets, there is no centralized trading location for the Forex and trading takes place through a number of centers located in cities including New York, London, Paris, Frankfurt, Hong Kong, Singapore and Tokyo, to name just a few, with trading being conducted by telephone and increasingly over the Internet. Principally established to facilitate business trade across international border, today the majority of trading is carried out by currency traders who are looking to profit from small movements in the market.

Thanks to recent changes in the market’s regulations small investors can now participate in the market and the previously large transaction sizes have been reduced substantially and many trading restrictions either removed or relaxed. The advent of the Internet has also allowed large interbank units to be broken down into smaller units and standard trading lots of $100,000 are now accessible to the smaller investor who is permitted to trade on leverage of up to 100:1, which means that a $100,000 trade can be controlled with as little as $1,000.

There are many advantages to trading in the Forex including its accessibility, liquidity, the open nature of the market and its commission structure.

Because the market is effectively open 24 hours a day 7 days a weeks and operates largely over the Internet, traders can now work from home and set their own trading hours. And, because the market is so liquid there is never any problem in trading as international banks are always willing to set bid and ask offers and there are always buyers and sellers for any currency. Just as important, currency prices tend to move in response to changes occurring within national economies and, as news of such changes is readily available to everyone trading in currencies, the market does not suffer from the problem of ‘insider dealing’.

Perhaps one of the greatest advantages of the Forex lies in the cost of trading. Unlike other markets there are no commissions payable in currency trading and brokers earn their money from the ’spread’, or the difference between the buying and selling price of a currency.

But perhaps an even greater advantage lies in the way in which the market operates. Currencies are always traded in pairs with one currency being bought and the other being sold. For example, you may be holding US dollars and sell these in order to buy Japanese yen. Currencies are constantly moving against one another and so, whatever currency you are holding, you will almost always find that there are other currencies moving against your currency to your advantage and offering you the opportunity to profit from that movement. The market also follows well established trends which make it relatively easy to read the future direction of current movements.

The Forex market is one of the world’s safest markets for traders and the entry requirements have now been set low enough for even the small investor to try his hand. With a good training course behind you and a currency exchange calculator at your side Forex trading will prove to be a very enjoyable and lucrative endeavor.

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Have you thought about making more use of solar options to help save the environment? The good news is that solar options can save you money too! Though you’ll have to make an investment to begin with, solar options are largely low maintenance, and cutting down on fuel expenses can save you money worries in times to come. 

Installing solar options in less expensive than you might think, with the price of many leading products falling as they become more popular. In some jurisdictions you can get government grants or loans to help you with the cost of installing solar options which reduce the carbon footprint of your home or business. Most products of this type no longer need to be installed by specialists but are quite easy for you to set up yourself, again reducing your costs. 

Contrary to many people’s concerns, it’s possible to use solar options without being dependent on them. A house which draws its energy from solar options can switch to using the regular electricity grid on gloomy days, so there’s no need to worry about struggling during the winter. This means that solar options can be worth considering even if you live in a place which frequently suffers from cloudy weather. 

Unlike wind power and other renewable energy sources, solar options are quiet and non-intrusive. Once they’re installed it’s easy to forget about them and let them get on with their job. They’re an excellent way to spend money whilst you’ve got it so that you don’t have to worry if you expect to be hard up in the future. 

For this reason, solar options can be a great choice for elderly people, leaving them with more cash free day to day as they become less capable of working. What’s more, if you settle into your retirement using alternative energy options you’ll know that you’re doing your bit to leave a better world for your grandchildren.

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