Posted tagged ‘trading’

Investments Trading – Which Way?

March 27, 2009

Yesterday we discussed investment options.  There are so many ways to invest your ISA allowance as we discovered, but what about longer-term investments?

Many people are now thinking about the future, and building up a security for later years – for themselves or for offspring.  A dabble in the trading game might appeal to many, so what are some ways to go about this?

1. Forex trading – this is an obvious way to get into trading.  Easily  accessed, and the largest liquid market at your disposal, you can play the currencies of the world and make good returns on the right decisions.  You get to start by using a demo account, so you can play a virtual game of monopoly with ‘fake’ money – an excellent way to start gently, get the hang of it and be sure before getting in too deep.

2. CFD trading – this is much more risky and tough, so not for the fainthearted.  It is also not for laid back investors who want to buy and forget.  CFDs require hands-on attention and being prepared to make a sharp decision quickly.  CFDs are unique in that you don’t actually own the share.  Rather, you make profit – or loss – on the difference between the price at which you bought and the price at which you sold at close of contract.  It is best to really consider how willing you are to give over some of your time and attention to CFDs before you enter into a contract.

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The Future for the Yen in 2009

January 28, 2009

The author is on a bit of a roll these days with concentrating on world currencies.  It is an interesting time for currencies though.  To compare exchange rates may not be everyone’s cup of tea but it is interesting if you look at some of the basics.  So far we have concentrated on the pound, the euro and the US dollar so now let’s have a quick look at the Japanese yen.

This currency has had a pretty strong year compared to others – 13 year highs against the US dollar and a rise by over 35% against the sterling – but as we have seen with the Euro, this isn’t necessarily a good thing.  Japan relies heavily on export, and obviously people are less likely to want to buy from the Japanese if their currency is so much stronger than theirs.  Toyota, the world’s biggest car maker, reported its first losses in 70 years.

The Bank of Japan has also been aggressive in its rate cutting and even reached 0.1%, just shy of zero.  So until they calm down and the market as a whole gets less volatile, things will remain difficult for the yen.  Sure, Japan could ask for assistance from its peers in order to try and weaken their currency, but the US and Europe are very unlikely to want to make their currencies stronger (especially Europe who are already in a situation very similar to Japan).  So perhaps it will be something of a waiting game until things steady themselves out before people gain confidence.