Apr 062016
 

The following post was written by staff writer, Peter.

Have you been keen on developing a sustainable means of wealth management? Are you tired of waiting for long-term profits? If so, the Forex markets are certainly worth a closer look. It is nonetheless a fact that 2016 has proven to be a rather turbulent year (so far) in terms of market indices in general. In order to capitalise on the opportunities that await, it is critical to understand how such fluidity can be used to your advantage. In other words, what basic principles should you keep in mind to succeed within what can only be called a changeable marketplace?

Appreciating Risk

Much like any investment, there is always a level of risk associated with the Forex markets. Due to the liquid nature of currency pairs, this risk is seen as being more substantial when compared to other sectors such as commodities or blue-chip equities. So, it is first important to realise that you will need to be exposed to a certain level of risk in order to accrue profits. The key here is to determine this exposure and never exceed your set financial threshold during any given trading session.

Appreciating the Potential Role of the “Brexit”

Speculation is rife that the United Kingdom may decide to leave the European Union. Whether or not this comes to pass is yet to be seen. The concept to appreciate here is that even talks about this scenario will lead to swings in value between the pound and the euro. Once again, volatility can prove to be beneficial for those who hope to capitalise on short-term knee-jerk reactions. It is therefore prudent to keep one eye tuned into the latest news. Whether or not any “Brexit” comes to pass, there are still profits to be made.

Taking Advantage of Volatile Times

Many astute Forex traders will wait until rather volatile times to enter into a position. This arises from the fact that profits can be realised quicker when compared to more stable trading periods. As 2016 has already seen massive currency swings, those who adopt this technique could very well enjoy higher profit margins. However, the levels of risk involved should nonetheless be mentioned. There is a massive difference between executing a well-informed position and simply relying upon “gut” instinct or a “sure-fire” tip.

Professional Trading Platforms

Any trader with even a moderate amount of experience will attest to the fact that the choice of a trading platform can make the ultimate difference between a successful wealth management strategy and one which is obtuse and uninformed. This is why a growing number of investors from all walks of life have taken advantage of the tools offered only through CMC Markets. With such cutting-edge instruments at your disposal, much of the guesswork can be taken out of the entire process.

Forex trading involves experience, prudence and adapting to changes as they occur. These simple tips will help to ensure that you create a firm foundation from which a successful wealth management strategy can be enacted.

Mar 072016
 

Canada Says Farewell to Gold

One upon a time most currencies were backed by gold. But in 1971 president Richard Nixon took the U.S. off the gold standard switching to a floating currency instead so its Central Bank can exert more influence over the currency, and other countries followed suit. Today, everyone uses fiat currency and gold is no longer relevant on the world’s financial stage.

Canada use to have more than 1,000 tons of gold in the 1960’s as part of our foreign exchange reserves. But Ottawa has long forsaken the notion that gold can be a useful diversification tool for a country’s monetary interest. For decades Canada has been slowly selling off its gold reserves, and according to the Finance Department, it only has 77 ounces of gold coins remaining today, which is worth about US $100,000. That’s nothing more than a rounding error compared to the US $80,000,000,000 of total foreign exchange reserves we have.

As Canada gets out of the gold game, others are buying more. According to the World Gold Council, central banks around the world added a net of 336 tons to their reserves in the second half of 2015, representing a 25% increase from the previous year. Russia and India have increased their holdings. And since the start of this century China has bolstered its gold reserves by 350% from 400 tons in 2000 to nearly 1,800 tons today. Even individual investors have helped take gold off the Bank of Canada’s hands. A couple years ago I blogged about buying a 1 ounce limited edition gold coin for CAD $1,389. It’s easily worth 20% more today given the current spot price of gold. 🙂

Here’s a look at the biggest holders of gold by country. (source)

16-03-gold-reserve-by-country

Based on the chart above, we can see that the U.S. central bank holds the most gold by a wide margin. The 8,133 tons of gold held by the U.S. make up 72% of its foreign exchange reserves. The next 3 countries in the list, Germany, Italy, and France also holds more than half of their reserves in gold.

It’s interesting how other central banks seem to be holding or even increasing their gold reserves while Canada has done the exact opposite, lol. I’ll write about the possible reasoning behind these two diverging ideologies around gold in a future post, but it has to do with the nature and purpose of Foreign Exchange Reserves, which requires a rather lengthy explanation.

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Dec 142014
 

What you can buy for a Canadian dollar these days is absolute noncents. 😀 The loonie has sunken to a multi year low, valued at only $0.86 U.S. The lower Canadian dollar rate today means it’s more difficulty for Vancouverites to pick up milk and cheese for half the price across the border.

14-12-canadian-dollar-value

This Canadian dollar trend going lower will probably continue into next year due to lower commodity prices and a stronger U.S. economy. This is excellent news. 😀 When the price of oil and other goods fall it’s known as deflation. Many economists and central bankers would tell people that deflation is bad. But don’t let them fool you. Deflationary pressures can create an excellent environment for saving money and finding undervalued investments for those who know where to look. 😉

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