Abomag

You want to invest your savings in the short or medium term, but you do not know what kind of investment you choose? On all existing markets, I will now compare the Forex (Foreign Exchange) and the Stock Exchange (Equities).

The stock market is a relatively known in which an investor acquires shares (these are shares of a company's capital) at a price set by the market and sells them at a different price later. The goal when investing in stock market is to buy shares it is believed that the value will increase to resell and make a profit. It is therefore important to know the company in question, its economic situation, anything that can affect the price of its shares.

In addition to the benefits achievable on the purchase and sale of shares, the investor - the shareholder receives a percentage of profits made by the company during the period corresponding to the holding of shares. These are the dividends.

It is therefore possible to invest long-term stock market, driven largely paid dividends without necessarily being interested in the resale of securities.

Meanwhile Forex market is less known that is becoming increasingly important to individuals through the Internet. The challenge now is to buy foreign exchange in "speculating" on the change in their courses for resale by having made a profit.

For example, by buying U.S. dollars to 100.000 EURUSD 1.4050 at 15h and reselling EURUSD at 1.4022 at 16h, it invests € 71,174.38 and € 71,316,50 is recovered. We can play on tiny variations in the dollar to gain in this example € 142 an hour.

Yes you may say, but everyone does not invest € 75,000! And you're right. This is why almost all brokers in the world offer leverage for your investment. For example, consider a leverage of 1:100, which must be the lever as used today.

€ 5000 by placing on a Forex account, your broker offers to trade a capital of € 500,000. It's like an interest-free loan. The broker only makes money on your purchase orders and sales.

What is the risk? It is limited to the money you have deposited in your Forex account.
Let's say you buy a lot of British Pounds (100,000 GBP) and the price of the pound falling dizzily, the broker will automatically sell your lot if the estimated loss reached the sum you have in your account. So the fact of using leverage allows you to multiply gains and losses, but there is no risk of losing more money than you deposited.

It is important to stress this point because that's what made ​​me most scared when I got interested in Forex. Invest € 5,000 and € 50,000 can not lose.

The advantage is that the Forex market is more stable than the stock market (currency pair does not vary much as the action of a small company), the market is much larger (all central banks exchange currencies 24 hours over 24, amounting to several thousand dollars every day) and liquid (you can buy / sell and withdraw its profits in minutes directly from your PC).

Read also: 8 Reasons To Invest In Forex .

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