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1000Knives
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07 May 2013, 10:51 am

Anyone think about this? I've thought about it a bit, as I keep track of currencies because I used to buy a lot more stuff online from Hong Kong and Japan. Like today I looked at the yen and it's about equal with the USD(908 yen per 9USD). But at times, you used to be able to get only 85 yen per 1USD, but at other times the exchange rate is the opposite, and it's like 115 yen per dollar. The pound used to be worth a lot more, too. And Canadian dollars when I was a kid, you could get 1.5CAD per 1USD. Now it's equal.

I'm wondering about forex trading and exchange in general. Is it really risky? Obviously if you had a bunch of, say, old Iraqi dinars from the Saddam era, they're barely worth the paper they're printed on nowadays. But with relatively stable currencies? If I had some Canadian dollars in like 2001 and held on to them by 2008 or so, I'd have gained quite a bit of money from it going up to equal with the USD.

I don't have a lot of cash, though, but is it wise to buy some foreign currency even in amounts of, say, 100USD and just hold on to it and use it when the time is right? I'm not so sure about reselling it, but using it to buy items/services in the country of origin could be a neat idea. Anyone have ideas for other currencies to look into besides the yen? The yen interests me most as I've seen it go up and down over the years, and I could basically hold on to some yen and in bad times use the yen as, say, a 20% discount card getting stuff from Japan.

Thoughts?



eric76
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07 May 2013, 1:42 pm

Instead of obtaining currency of another country and holding onto it, I'd be far more likely to buy stock in solid companies in that country.



lotuspuppy
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13 May 2013, 9:31 am

FOREX is extremely risky. For one, currency fluctuations happen all the time, and can be quite dramatic. For another, trading commissions tend to be high for all but the largest traders (usually governments and very large banks). Individual investors are much better off investing in equities or mutual funds in target countries, mindful that currency risk is an added risk not present in their home countries.



zacb
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17 May 2013, 12:04 pm

I would suggest to buy adrs from a particular country, or just buy securities in general.



zacb
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17 May 2013, 12:06 pm

But if you were putting a gun to my head, I would suggest pairing the Rupiah, Mexican Peso, the Norwegian Kroner, and or the Rand. South Africas economy has a strong mining sector, Norway is based on oil, and the other two are speculative plays.



kate123A
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17 May 2013, 1:27 pm

FOREX is very risky. My husband has been doing it for years and has had mostly losses. My suggestion is not to do it.



aleclair
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17 May 2013, 11:39 pm

Are we talking about things like forex futures contracts? something like that would be highly speculative and therefore risky. A lot of FX derivatives, such as futures contracts, were designed so that firms who had an obligation to pay in a foreign currency later could lock in an exchange rate now, thus reducing exposure to, or "hedging" against, exchange rate risk.

You are probably better off investing in some sort of foreign/emerging markets mutual fund, unless you have a need for the foreign currency.