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Broaden Your Investing Horizons with Foreign Currency Trading and Emerging Markets

GlobeIn trying to become a financially independent person, I’ve certainly realized that it requires having diversity in my investments. While I am always trying to keep my Eyes on the Dollar, maybe it’s time I also kept my eyes on the peso, yuan, real, or rupee. I think many investors stick with what is most familiar, the US stock exchange,  when we really need to be broadening our portfolio with international and emerging market stocks or currencies. Luckily, there are several options for those who want to add some international flavor to your investments.

Foreign Currency Exchange

Foreign currency exchange or Forex trading has become a popular topic in financial blogs. You can take a Forex trading course, then set up an account through a broker and buy or sell foreign currency, depending on whether you think that particular currency is going to rise or fall. Forex is experiencing huge growth in availability in many international markets, including India, Latin America, and the Middle East. Because this market exists in several time zones, it is pretty much accessible 24 hours a day for those who don’t like typical Wall Street hours.

Emerging Markets

While many of us tune in to what is happening in the US, Canada, or Europe, there is a whole big world out there as far as investing is concerned. Emerging markets are those which are in the process of rapid industrialization. We tend to think of China or India, but other nations like Mexico, Argentina, and Malaysia have also show considerable growth in recent years.

One really nice thing about investing in emerging markets is the variety of options. You can pick a broad index fund or ETF likeVanguard Emerging Market ETF if you want a sample of many markets.You can also invest in an individual country’s market with funds like the iShares MCSI Mexico ETFor Global X Funds Argentina 20.

Do Your Own Research

In the past, I’ve tended to stick with what is familiar. Even the US stock exchange can be confusing to novice investors. Thinking globally can seem overwhelming when looking for investment options. My advice would be to do your own research.

  • Really study and understand why your are making an investment and what your risk tolerance is.  
  • Don’t jump into an investment just because it’s the hot topic of the day.
  • Never want to put all your investment eggs in one basket.
  •  Look at potential for growth, and realize that there is a big world out there that becomes more modern and industrialized all the time.

I certainly need to do more research myself, but emerging markets and currency exchange seem like promising ways add diversity to my investments. I would hate to miss out on a great opportunity because of fear of the unknown.

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.

4 comments

  1. Although I invest part of my portfolio in foreign stocks (mutual funds), I skipped emerging markets and foreign exchange.

  2. Very interesting, Kim. I’d be interested to know what you think about Latin American investments in particular, as they’ve seen major growth but are perhaps forming bubbles along the way…

  3. Did not know too much about these markets so thanks for the information. I think this definitely requires a lot of study and not everyone has the appetite for such risk. But this may end up being a place where a lot of money can be made. (Yikes, or the next place where people lose their shirts!)

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