The ascent of managed forex funds commenced around 3 years ago. Investors were weary of losing their investment on the stock market, and were actively seeking out an asset class which would make a profit in good times, and also when the economy was suffering. Many people thought that investing in real estate was the answer, and invested heavily in buying rental apartments, and second and third homes. But when the credit crisis happened, many people lost everything.
But those wise enough to invest in forex managed funds avoided all of this. Currencies performed very well as all other asset classes crashed. The main reason for this is that an investment in the currency market is totally uncorrelated to any other asset class. In other words, if the stock market goes down, the currency market may still go up.
Diversification is the key to getting better investment returns. Whilst the experts may disagree on the exact way to do this, all agree that a balanced and broad portfolio, containing investments in many distinctive asset classes, is key to obtaining the best returns. A managed forex fund can therefore be seen to be a perfect addition to a mixed investment portfolio.
The advantages seem great, but are there any downsides to a forex investment? The chief problem is avoiding managed forex funds run by deceitful money managers. This has primarily been driven by the internet - all a manager need to do is to set up a website, and offer his services.. Therefore, an investor needs to do thorough research into potential investments.. This includes carrying out research on the money manager, seeing performance statements, and verifying where the manager is based, to check that he is genuine, and not fraudulent.
So what are the returns on managed forex funds? Well, the returns depend on a variety of factors, such as leverage, strategy, the manager himself, and the market conditions. The majority of forex funds have a return of between 10% and 60% per year, but this will vary from manager to manager, and also from year to year.
Some managed forex funds have very conservative trading strategies, and will therefore only have returns of maybe 12% or 15% per year. This is a low return, but the upside is that your risk is also very low.. Of course, you could opt for more risky strategies, where you could double your money - but there is also an inherent risk there aswell. The answer is to find a fund, and a manager, which is right for your level of risk tolerance.A lot depends on how much leverage the fund manager of the managed forex fund uses.
It is a simple equation - more leverage equals more risk, and more risk of a fund meltdown.. Leverage is the downfall of most currency traders, and this is no different for managed forex funds. Well, this can also happen to managed forex funds. The performance of a managed forex fund is only as good as the manager, and if the manager takes reckless trades, and big risks, then the fund will suffer the same fate.
To conclude, therefore, it can be seen that managed forex funds are better in a number of ways compared to all other possible investments. However, investors must still have to carry out in depth research into what variety of managed forex fund suits them. We saw that there are a wide selection of managed forex funds, and investors different investment targets. Researched well, a forex investment can be very lucrative for investors.
But those wise enough to invest in forex managed funds avoided all of this. Currencies performed very well as all other asset classes crashed. The main reason for this is that an investment in the currency market is totally uncorrelated to any other asset class. In other words, if the stock market goes down, the currency market may still go up.
Diversification is the key to getting better investment returns. Whilst the experts may disagree on the exact way to do this, all agree that a balanced and broad portfolio, containing investments in many distinctive asset classes, is key to obtaining the best returns. A managed forex fund can therefore be seen to be a perfect addition to a mixed investment portfolio.
The advantages seem great, but are there any downsides to a forex investment? The chief problem is avoiding managed forex funds run by deceitful money managers. This has primarily been driven by the internet - all a manager need to do is to set up a website, and offer his services.. Therefore, an investor needs to do thorough research into potential investments.. This includes carrying out research on the money manager, seeing performance statements, and verifying where the manager is based, to check that he is genuine, and not fraudulent.
So what are the returns on managed forex funds? Well, the returns depend on a variety of factors, such as leverage, strategy, the manager himself, and the market conditions. The majority of forex funds have a return of between 10% and 60% per year, but this will vary from manager to manager, and also from year to year.
Some managed forex funds have very conservative trading strategies, and will therefore only have returns of maybe 12% or 15% per year. This is a low return, but the upside is that your risk is also very low.. Of course, you could opt for more risky strategies, where you could double your money - but there is also an inherent risk there aswell. The answer is to find a fund, and a manager, which is right for your level of risk tolerance.A lot depends on how much leverage the fund manager of the managed forex fund uses.
It is a simple equation - more leverage equals more risk, and more risk of a fund meltdown.. Leverage is the downfall of most currency traders, and this is no different for managed forex funds. Well, this can also happen to managed forex funds. The performance of a managed forex fund is only as good as the manager, and if the manager takes reckless trades, and big risks, then the fund will suffer the same fate.
To conclude, therefore, it can be seen that managed forex funds are better in a number of ways compared to all other possible investments. However, investors must still have to carry out in depth research into what variety of managed forex fund suits them. We saw that there are a wide selection of managed forex funds, and investors different investment targets. Researched well, a forex investment can be very lucrative for investors.
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