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6 reasons to invest in forex

SPONSORED — If the current market is giving you pause, you’re not alone. With interest rates rising, commodities on the up-and-up and foreign economies weakening, knowing where to put your money can be pretty confusing. If you’re looking for an investment tool offering some stability in an uncertain market, it might be time to look abroad.

It’s bigger than the NYSE

Mirror, mirror on the wall, which is the biggest market of them all? If you’re looking to invest in the world’s largest market, consider this: foreign exchange trading averages $5.3 trillion per day, a mega-giant in comparison to the New York Stock Exchange, which averages $28 billion, and even the futures market, trading at $437.4 billion, according to DailyFX.com. That kind of prolific trading amounts to a whole lot of opportunity for investors.

It’s liquid

There’s just something about cash that can make you sleep better at night. The forex market is unique in its flexibility; it allows traders to exit the market quickly. If you’re unsure of the current market or may need cash in the near future, the forex market offers an easy method for quick liquidation.

You’ll benefit from other countries’ higher interest rates

If you’re a believer that cash is king, you can take that motto straight to the forex market. Investing in foreign exchange is essentially investing in cash only you’ll be taking advantage of higher interest rates from other countries central banks. This is a particularly attractive prospect given the historically low interest rates the U.S. has had in place for the last several years. With forex investing, you have the security and liquidity of cash, with greater opportunity for return.

U.S. rates are rising

There’s a reason you’re not seeing the huge market push to refinance mortgages; U.S. interest rates are on the rise. And that means the dollar will grow stronger, giving it an edge in the forex market. Additionally, a bolstering dollar inevitably pushes the U.S. equities market down, making foreign exchange appear ever more attractive.

It’s beginner-friendly

The beauty of the forex market is that it doesn’t require an advanced degree in finance to get in the game. According to Tracy Hubbard, an instructor at Online Trading Academy and investment manager trading approximately $200 million per month, forex is user-friendly for even the novice investor.

“Forex not only offers the greatest liquidity of all the markets; it is a natural trending market which makes it easy to trade and requires much less time to manage than equities or futures,” Hubbard said. “Since it is leveraged, your investment and risks are very small. You can trade micro lots which limit your investment to just $20.”

The bull market won’t continue

Sure, the past several months have seen a bull market rally for stocks. That said, don’t expect that trend to continue. According to CNN Money, there’s a 50 percent chance U.S. stocks will dive into a bear market this year with foreign stocks already there with a drop of 20 percent or more.

“Remember what got us here,” warned Ken Peterson, director of student support at Online Trading Academy. “Poor earnings of U.S. equities and weak economies abroad. Europe and Japan are now in negative interest rate territory, a first in living memory. These economies are so bad; their governments fiscal policy is to penalize savers in order to spur consumption.”

To learn more about Online Trading Academy, or view classes in your area, please visit their website.

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