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Smart Investing: What To Consider in Stocks, Bonds & Forex


Making investment decisions today is as challenging as the process of investing itself. Active traders have access to a growing number of asset classes. As diversification becomes more prominent, it’s more challenging for traders to decide which of these investments is the right fit for them. The blue-chip stocks market is considered less volatile, with a steady return on investment (ROI) potential for investors. Conversely, foreign exchange assets with high liquidity and leverage are considered more volatile. These assets have specific characteristics that set them apart from their peers. To help you choose wisely, we’ve compiled the top five things to consider when making strategic financial investment decisions.

Volatility                                    

Volatility is considered a measure of short-term price changes, and it has a lot to do with the profitability of an asset. Markets like foreign exchange (forex or FX) are volatile, so traders could benefit heavily from quick price increases. Although there is a possibility of the opposite happening, most investors rely on this volatility to benefit from quick price swings in the market. As such, we see more short-term traders attracted to the forex market.

 

Some of the most volatile currency pairs today are AUD-USD and CAD-USD, while the least are EUR-USD, AUD-CHF, and EUR-CAD. Buy-and-hold investors often populate the stocks and bond market because they prefer the stability and gradual changes attached to blue chips. So the question is, are you a short-term trader or more of a buy-and-hold investor? The answer would help you determine what’s best suited for you.

Leverage