John Jagerson from LearningMarkets.com reports “Currency investing is a good idea. However, before you get involved keep in mind that education is critical. Investors may attempt to shortcut the learning curve by investing in currency Exchange Traded Funds (ETFs) because they trade like stocks but they won’t act like stocks. However, the similarities end here. Currencies are not like stocks or bonds, which are designed to deliver a return on investment. Therefore currency investing is subject to an entirely different set of expectations.”
“As investors look for new ways to make money and diversify in the financial markets, currency ETFs have become a way to speculate on movements in the international market by shorting a weakening dollar or buying a strengthening yen. We generally like these products as a low-cost, low-leverage way to make an investment in the currency market. However, we start running into issues with the new “emerging markets” currency ETFs,” Reports John Jagerson.
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