Features and Benefits of Investing in Foreign Currency
Forex is an awesome way to broaden your portfolio. Since its flexible in nature, it doesn’t require a lot of time commitment. Therefore, giving you leeway in terms of flexibility. Additionally, the learning curve on forex is not as high thereby, making it an asset class worth exploring. Today, we take a deep-dive into the benefits of investing in foreign currency along with a list of the best currencies to invest in. Let’s get started with international investment company Forex Chief.
Benefits of Forex Investing
- Largest Financial Market: The forex market is the largest financial market in the world. An average of $4 trillion USD is traded on a daily basis. Traders from everywhere trade in the market. Therefore, it’s very accessible.
- Easy Accessibility: Other financial markets have high barriers to entry. The foreign currency market is easily accessible. Therefore, traders don’t require a large initial investment making it perfect for beginners.
- It’s a 24-Hour Market: Unlike other exchange systems, this market operates 5 days a week. It’s also open for 24 hours every day. You have access to the market at any time. Therefore, you can create your own schedule and have the flexibility to be as active or as passive as you want to be.
- Low Transaction Costs: A majority of brokers profit through spreads. Spread in trading is the difference between the bid price and the ask price. Often-times, it is really low. Therefore, making forex relatively cheap.
- High Volume, High Liquidity: A large volume of cash goes through the forex market on a daily basis. There’s a lot of liquidity in the market. Change in demand on a particular currency doesn’t have any effect on its value.
Best Currencies to Invest In
All investment vehicles always carry a certain level of risk to them. The same applies to investing in foreign currency. The best thing you can do is to diversify and invest capital into different currencies. The goal here is to make sure that you focus on the most stable ones to reduce the risk of loss. You can invest free money with ForexChief. With that said, here are the best currencies to invest in:
- United States Dollar (USD): This is the largest currency in the world. It is also the most traded, thus, it’s massive popularity. Almost 90% of trades are made in USD. This makes it one of the best currencies to invest in.
- The European Euro (EUR): This is the official currency of Eurozone. In terms of currency reserve, it’s the second largest after the USD. Therefore, it’s a stable currency to invest in.
- Japanese Yen (JPY): Japan’s inflation rates have been extremely low for a very long time. Additionally, the Japanese Yen is not pegged to the USD or the EUR. Therefore, it always retains its purchasing power even in terms of instability or crisis. It’s an excellent currency to trade and invest in.
- British Pound (GBP): This is the oldest currency in existence today. Compared to other currencies, the GBP is a little volatile. However, since it’s the fourth most traded currency in the world, it’s safe enough to invest in.
- Swiss Franc (CHF): The CHF is an excellent currency to invest in. It’s an excellent investment asset because the country enjoys a stable economy, low levels of unemployment, and an advanced banking system.