How to Purchase Shares in the Forex Market

How to Purchase Shares in the Forex Market - By: john franke


It is either the different nations, most especially the Asians, have cut prices or they have tied their currency to the dollar's value which is why most Americans do not feel the decline in dollar. The implication of this is pretty simple and that is the prices of the products imported from them haven't increased. But once you visit Europe, you would be shock as to how much the dollar is only worth today.

What will be the next event after this? What happen to those dollars that you have worked so hard for? You have to be wise even if the Fed claims that inflation is under control.

The spending power of your money will be divided into two in just 24 years and to think that the annual inflation rate is only at 3 percent. You need to double the money that you are earning right now in order to maintain your current lifestyle in the future. Now that's quite some crazy thought, you may think.

What you need to do is to consider some form of hedge to be able to protect you from the devaluation of the dollar in the future. Gold is the basic way of hedging but today, it is a lot easier for investors to invest into other currencies. What speculators trade are foreign currency futures but for those who are more conservative and prefer long term investing, there are other suitable investment alternatives for them.

A type of investment vehicle is the foreign currency bank certificate of deposit or known as CD for short. In order to transact here, there is no need for you to open an account in a foreign bank to trade your dollars into other currencies. There are a variety of FDIC insured certificates wherein you may find them online and the good thing about this is that they are denominated into different foreign currencies.

The interest you earn is equivalent to what you'd earn in a foreign bank. There are two possibilities that may occur when you convert your CD back into dollars and this can either be you would earn or you would lose money. At the very least, you should be willing to invest $10,000.

Another form of investment that you might want to use is foreign currency ETFs. This one is a listed security wherein the value of it is based on the assets inside the fund and this basically is a new form of exchange fund traded in the market. These assets are foreign currencies such as one currency ETF such as British pound, euro or any other currency. The NYSE or Amex is where these shares are traded wherein it would give you the impression that you own a currency in a foreign money market account.

You may also choose to go with currency mutual funds. There is a classification of mutual funds that invest directly in hard currencies. The assets of the no load fund now grew to $110 million which it only started in May 2005.

The advantage of this type of fund is that the investor may choose from the wide variety of foreign currencies selected by the manager. This is perhaps a good thing because in this manner, the investor would be able to invest on a longer basis since he or she is already exposed different investment forms. Currently the fund has about 43 percent of its assets in the euro, another 16.5 percent in the Canadian dollar, about 10 percent in the Swiss franc and smaller amounts in Swedish, Norwegian, British, Australian and New Zealand currencies, as well as 8 percent in gold. The minimum investment for this is $2,500 wherein you may download the prospectus and application of this from their website or also, you can purchase it from their fund networks.

That dollar that you are holding right now counts a lot. You'll be needing lots of these and just hope that they'll be still valuable for your retirement. It's a bet you might want to hedge in some small way and that's The Savage Truth.