Considerable turmoil is underway in the financial markets. Increased regulation, rising inflation, energy sector disruptions, civil unrest and war are taking a toll on the global economy. In 2022, what is the reason why FX as an investment method has risen to the top as a global trend? Against the backdrop of current events, the international broker’s OctaFX team of experts has gathered some answers.
The world of finance is currently undergoing some significant changes and shocks. This has been going on for at least two-and-a-half years since the global coronavirus pandemic began.Now that most national economies have implemented monetary policies, inflation has spread like a virus to all continents. , is raging. All countries remain pristine. Ordinary people lose their savings, money and purchasing power of their own currency. The government will regulate as much as possible. But the current situation, many of which are quite unprecedented in recent memory, has led to policies restricting some financial markets. Among them, the foreign exchange market. The problem, however, is that it’s foreign exchange investment that’s been getting a lot of attention lately, and it’s now an international trend.
Now that we know the current situation, we can look back at the history of financial investment, especially its relationship to the Forex market.
simple investment history
The history of investment goes back a long way. Thousands of years ago, people from different tribes, villages, and regions found routes and means to exchange all kinds of goods, including livestock, precious metals and rocks, and domesticated wheat. Each of these ancient trades and trades was an investment as capital, as confidence in future trade relationships, or often as a means of survival.
The foreign exchange market as a hub for making investments is about as old as ever, at least since the invention of coins as currency of exchange, at least around 600 BC. It can be viewed as a dynamic basket and exchange network of foreign currencies. More bluntly, Forex represents the process of changing one currency into another. The Forex market is inherently decentralized. Today it exists entirely online and utilizes a wide variety of countries, currencies and commodities.
A giant leap forward to what it is today, forex is making a huge comeback worldwide as a way to make investments. In times of quarantine, home offices and lockdowns, mass layoffs, and the uncertainty of a sluggish, inflation-fueled economy, many people are looking to alternative approaches to generating additional or passive income online. forced to research. Forex came out on top.
Why is this trend emerging now?
Many factors have contributed to the growing interest in foreign exchange. As mentioned at the outset, the developments in geopolitics, the global economy and the aftermath of his COVID-19 pandemic have created a series of uncertainties in financial markets. The war in Ukraine has significantly weakened the EU’s compounding economy and its euro. This ongoing process has allowed the US dollar to catch up to full equivalence, which has not been done since his 2002 20 years ago. With this strong performance of the American currency, even retailers took notice and sought powerful opportunities to engage. Where foreign exchange is gaining momentum, other assets such as stocks and real estate are weakening. Few people enter data for fear of miscalculation.
Commodities can also be traded and invested via forex. On the other hand, important things like natural gas and crude oil are constantly rising in price. One aspect of oil prices exploding is that OPEC members have not yielded to US demands to significantly increase monthly production. On the other hand, the price of natural gas was US$43.99 in June 2020, but in June 2022 it was US$483.23, an increase of 998.49%. Only foreign exchange can take advantage of such dramatic 10x price movements.
Forex — one of the best investment types
Since investments can be a legitimate source of passive income, let’s take a look at an overview of the most solid and relevant assets that can serve as investments, especially in relation to Forex.
Money It is a historically proven type of investment, an excellent long-term hedge against inflation and has a strong track record. The downside is probably its physics. Unlike Forex, gold should be kept in a safe and secure place. The more, the more storage and safety becomes an issue.
like gold, real estate It’s a tough road to make an investment. The advantages are security and relatively low price fluctuations. Also, the owner can rent out the property, thereby earning passive income in an easy way. Forex doesn’t cover these options, but it does have great advantages elsewhere. Initial investments don’t have to be as high as they normally would be because they work on the real estate market. In Forex, US$20-100 is usually enough to start participating in the Forex market.
Cryptocurrency It is a recent addition to the financial markets. All thanks to Bitcoin. Bitcoin has managed to convince many legacy financial institutions and even governments to become investors over the past two years, despite its ongoing downward trend. As cryptocurrencies stand out in the forex space, they combine many of the advantages of both worlds. Cryptocurrency trading benefits from forex-inspired security measures such as stop-loss orders and negative balance protection.
However, when it comes to investing, cryptocurrencies carry a high degree of risk. Individual crypto projects can say one thing but do another. As Celsius Network and its CEO Alex Mashinski demonstrated painfully this summer. Most clients in financial services have probably lost all their money.
Things are a little different with Terra Luna, an algorithmic stablecoin project that is said to have imploded due to a serious but unintended technical miscalculation of its development team. Such cases are very rare in Forex. Because the currencies and commodities traded there are historically reliable assets that are well equipped for sudden defaults.
save account When cash savings The benefits will be demonstrated in times when the economy is stable and prosperous. But in times of inflation, these options can quickly become a bottomless pit. The two more practical options are inherently more static. Savings accounts in particular are contracts that you enter into with banks that contain various types of unfavorable clauses in case you wish to close them prematurely. Because it is possible.
stock There are advantages even in a bull market. Especially when he made successful investments like buying his Amazon stock before 2016. Shares actually give individuals proportional ownership of the company. The more shares you own, the more ownership you have in the company. But for now, the stock market is plummeting. It is difficult to ascertain the medium-term outlook and how long the downtrend will last. On the other hand, the dynamic nature of forex gives investors many short-term options to change their investment portfolio during the run.
Certain government pressures on all areas of private investment cannot be ignored. As the forex industry is currently experiencing, people lose income and savings as government policies fail to adequately respond to significant hazards such as inflation while certain restrictions are in place. There is a possibility.
it doesn’t have to be like this
How can someone get out of this vicious circle and take responsibility and make meaningful, productive and potentially highly profitable investment decisions? Let’s take forex as an example again.
A trustworthy and trustworthy broker is the first and most important step. A broker with at least 10 years of experience in the financial markets (OctaFX, XM, eToro, etc.) is a solid choice. Pay attention to broker reviews and awards have to pay. All of which should be available for research online.
There has never been a more urgent time to meet financial goals. Given the dire economic crisis raging around the world, the investment decisions they make now can have a dramatic impact on their future.
