If there’s one thing disliked more than the IRS, it’s clichés. But we’re going to make an exception for this article. Smart investment centers around three words: diversification, diversification and diversification. One of the best ways you can diversify your investments and position yourself for big payoffs is trading foreign currencies.
Simply put, by trading foreign currencies, you make money by selling money. Pretty cool, no?
If you think trading in currencies is for the super wealthy or those with an inside line to the decision makers, it’s time to think again. Just as shopping for practically anything can be done online these days, you can trade in foreign currency with the click of a mouse.
One of the huge perks of trading currency is that you can make money when the economy at home is sliding. Think of it like this: if you’ve got a bad feeling about what the folks in Washington, DC are doing and think they’re going to cause the US economy to tank, bet against the dollar. You’ll actually benefit if the economy does go south. You’re not being unpatriotic: you’re realizing the American dream by being smart and seeing opportunity from the shortsightedness of others.
Before we go any further, we must emphasize that, as with any new investment or financial opportunity, it’s smart to leverage with the knowledge of people who do this type of thing for a living and know all the ins and outs on the legal side. We can help you out there.
Now, to invest in or trade in foreign currencies, your basic survival kit will consist of a:
- Commitment to ongoing research, because the markets are nearly always in flux;
- Brokerage or PayPal account;
- Bank that accepts or deals in foreign currency;
- Foreign currency certificate of deposit (CD); and
- Forex (foreign exchange) online account.
Again, this is no big deal; we can help you with all of this.
Benefits and Risks
There are numerous benefits and risks with investments in foreign currency, but we’ll touch on the most weighty ones here.
First the benefits.
There is no closing bell. The foreign currency market runs 24/7 356. This is a good because you can join the market on your time. Many traders take advantage of software to run their trades automatically when they’re busy with other things.
The foreign currency market offers perhaps the most opportunity. With daily activity often exceeding $4 trillion per day, it is the largest and most liquid market in the world.
Variety gives you flexibility. Because there are many different types of currencies, you can turn a loss around by trading in a different currency.
Now for the risks.
There is a small initial investment required. This is called a margin, and it’s used to provide access to the forex market. At times, there are fluctuations in this investment which can require you to pay just a bit more.
The 24-hour market can also cost you just a bit. Because the forex market is 24/7, exchange rates can change before trades have settled. In other words, currencies can be traded at different rates throughout the day.
A currency crisis can occur. In many developing countries, any fluctuation in their political system can have a dramatic effect on their currency.
We’re Experts and We’re Here to Help You
There are many benefits to investing in foreign currencies, and you don’t have to be a big player to take advantage of them. But to make sure you’re able to reap all of the benefits, work with an expert.
Remember, as a US citizen, you’re required to pay taxes on monies earned anywhere throughout the world. Our expertise can help you not only make money, but keep more of the money you make.
Our specialty is the FBAR (Foreign Bank Account Report); it’s a requirement for all US citizens who earn monies in other parts of the world.
Get in touch and let us start working for you. Contact Eric Stuhler at firstname.lastname@example.org.