Top 5 Benefits of Investing in a Forex Fund vs. Stock Market Fund:
1) Largest and most accessible market in the world – The Forex Market is the largest and most liquid open trading market in the world, with daily trading volume currently exceeding 5 Trillion Dollars (In comparison, there is only $25 billion of daily volume on the New York Stock Exchange – NYSE). Because of the size there is far less ability for any one institution or country to manipulate the movement of any one currency. It has very quick turn-around time to return funds on trades – generally forty eight hours. The forex market is traded 24 hours a day, five days a week—starting each day in Australia and ending in New York. This gives significantly longer trading hours for forex trading and thus more profit opportunities versus any one particular stock market (The North American stock markets are only open Monday-Friday 9:30 a.m. – 4 p.m. EST).
2) Currencies move independent of the stock market – Forex market fluctuations generally do not correlate with the stock market up and down movements. This means whether the stock market booms or crashes, the currency market will not be effected. It means there are always profitable opportunities in the currency market, as currencies move relative to each other – meaning if one currency goes down, another must move up.
3) Ability to create more predictable, stable returns – Relatively small movements in currency pairs can translate into large returns as compared to stocks. A movement in a currency pair of just 2% can translate into a profit of several thousand dollars. A particular stock or industry can be affected significantly by unexpected or unforeseen events, a good example currently of this would be the trade war going on between the US and China.
4) Currencies are backed by Governments and their central banks – giving a larger measure of legitimacy, stability, and consistency to the underlying investment. When you buy currency pairs you are literally buying money, a store of value and carrying the full backing of the nation it belongs to. All of the top traded currency pairs are G20 economies: US, UK, European Union, Switzerland, Australia, Japan, New Zealand, and Canada.
5) Over 80% of transactions are related to a US currency pair – The US Dollar remains the worlds dominant currency – US remains the worlds largest economy. The US Dollar remains the primary international reserve currency – US Dollars are the medium of exchange for many major cross border transactions, such as Oil – the US is the largest and most liquid financial market in the world.
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