re: Forex

Russian said a lot of what needed to be said, I'll just note the following:

In the forex market, you're really just flipping a coin and paying for the privilege of doing so. Major banks trade billions of dollars a minute (if not faster), and they devote a lot of time and resources to figuring out where the market will go next. You will not do better than they do.

Usually that means over the long run you'll make the short-term money market rate, minus transaction fees. For small players transaction fees are relatively large, but if you don't trade often and keep your bet size down this isn't a terrible thing to do, in fact it gives you some diversification.

Full disclosure - I do this a little myself, for the diversification. I do not expect to make lots of dollars doing this. I expect to smooth the volatility of my overall portfolio, and nothing more.

Oh yes, I almost forgot ...

quote:

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It seems to me that most folks in the investing community feel like the dollar is not going to be all that strong in the coming years.

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That's a popular theme but the reality is that 30 year rates aren't all that great. Believe what people bet on, not what they about.


One last thought - since I aim for smoother returns and not for extra dollars due to outguessing those multibillion dollar banks, I simply buy a basket of currencies. If you are considering a specific currency (such as the zloty) then you are not really diversifying, you're making a directional bet. And like I said, that really is just flipping a coin in the long run, trying to outguess national banks is something the pros will not do any worse than you and me. After all, they are the market.