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A Brief Comparison Between Forex Market and Stock Market

Both the stock and the foreign exchange markets offer you huge income earning opportunities. Now, rising number of retail and institutional investors are participating in these financial markets. Hot debates have also cropped up regarding forex vs stock. Now, investors across the globe are thinking which is the better investment option, forex or the stock. Investing in both stocks and forex have certain advantages and disadvantages associated with them. It depends entirely upon the discretion of a particular investor whether to invest in forex or stocks. Here we make a comparative discussion on forex vs stocks.
Stocks or equities are popular investment avenues which are in vogue since long. Stocks are issued by the companies to raise capital needed for that company. Generally, when a company performs well, its stock price increases and vice versa. By purchasing the stocks of a company at lower price and by selling them at higher price, you can make monetary gains. In some cases, profit making companies issue dividends to the shareholders. Stocks are traded in the stock markets. The two major stock exchanges in the country are the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Stocks of most of the companies are listed in one stock exchange. However, there are some big companies whose shares are listed on many stock exchanges. Whatsoever, investing in stocks is regarded as wonderful long term investment option. It has been proved time and again that in the long run return from stock market investment outweighs return from all other types of investments.
Again, the currencies are traded in the foreign exchange market. The market for the foreign exchanges is generally treated as a short term market. The main characteristic feature of this market is that most traders who engage in forex trading, enter and exit the market within a day. The forex traders sometimes enter and exit from the market within few minutes.
Stocks are traded for limited hours. There are several stock exchanges throughout the world but each of them are separate and have fixed trading hours, whereas, forex market operates on 24/7 basis. Moreover, forex market is the largest financial market in the world. Forex market handles transactions worth of $1.5 trillion on a daily basis. On the other hand, daily trading volume on all the stock exchanges in the country is $100 billion.
Whatsoever, both stocks and forex offer huge income earning opportunities to the investors.

Is Investing in Gold a Good Option?

My interest in investing was perked not by the prosperity of recent years but by the even more recent crash. Why did so few see it coming?

I looked to so people around me, real people who invest and have done well for themselves and asked myself what were they doing. Probably the most enegmatic investors recent choice was gold. Right now I know he is sitting in his home in Vietnam laughing at his good fortune, he had bought back into his favorite investment right at the start of the most recent surge.

Some of the factors that increase gold value are quite obvious, gold is seen as a safe haven when we enter a finacial crisis, currencies tumble, interest rates drop and banks fail it seems it is a perfect recipe for a surge in gold prices that we have recently seen. Gold is also an investment countries like to make and when emerging economies like India and China which are also growing quickly buy 10s of tones or more of gold it starts to look even better. The falling value of the US dollar is also having its effect on the value of gold.

Of course you don’t have to invest in gold directly, you can also invest in gold mining companies

Gold does not pay interest which puts some investors off it. I can undersand, not because it pays no interest but because only somewhere around 20% of all gold mined is actually used for anything, the rest of it just sits in a vault filling investment portfolios or on your wifes finger. You could say that gold stored in the ground is no less useful than gold stored in a vault, the process of mining it for anything other than consumer use is really a a complete waste of resources.

Regardless gold proves to be a good investment and unless there is a massive shift in the shared concious of humanity it will never be revalued according to what it is actually used for. As a starting point for those new to the market I think gold is a solid investment, it is definitely something you should always consider depending on market conditions. I think even those who don’t like the idea of it realise that as a purely numbers game and a safe haven it has proven its worth.

Penny Stock Trading

I had never heard of penny stocks before today and so I did a bit of research to find out some more about them. Obviously buying stock for a dollar with potential to earn a huge return is appealing to new and beginner investors but is the potential really there or is this just other get rich quick scam?

My initial research suggests that penny stocks may not be a good investment, their risk vs reward ratio can vary greatly. In investing circles penny stocks are stigmatized as finacially troubled companies that are ready to go bankrupt or making a last ditched effort to rescue themselves from it.

Penny stocks are only really appealing to other penny stock investors which means people are not willing to spend a lot to buy them, this make buying low and selling high difficult, other investors just don’t want to spend more than you have on risky and what they see as low quality stocks. It’s very hard for penny stocks to get off the ground as big players who have the real power to move their value up are excluded from buying them.

The overwhelming impression I get is that penny stocks are for people who want to gamble on the stock market, not for people who are looking to invest in it. You are better off doing some forex research and having a go at that.

My feeling is that looking for higher value and quality stocks that will pay a good dividend is a much better option. Playing in the low end of the market to get started is not a solid way to start investing, it’s a real case of you get what you pay for.

On average the best performing stocks in the market are at around $30, it would be a much wiser choice to hunt them out with good research than to play with penny stocks which is often like trying to pick the winning horse on if you like its name.