Foreign exchange (FOREX) and our portfolios

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About half of The Monday Morning Millionaire Program members are Canadians. We recommend that they keep their investments, cash and near-cash in US dollars. The chart above shows the US dollar to Canadian dollar relationship over the last decade. Investors following our recommendations are ahead.  If we go back to two decades, there were two brief periods when the Canadian dollar was stronger. Two brief periods!

Will the US dollar continue to be stronger? The correct answer to most questions about the future is “I don’t know.” Nevertheless, the continued strength of the US dollar is highly likely.

However, we need to accept inevitable currency fluctuations many of which will have an impact on our portfolios.

The chart above shows the US dollar to Canadian dollar relationship over the last week. There was a one-cent drop from the highest to the lowest point. A one-cent drop is a $10,000 drop for every million dollars invested by Canadians.  Such a drop could produce a portfolio value decrease in a rising market! That is exactly what happened on February 12.

Conversely, a one-cent rise is a $10,000 rise for every million dollars invested and could produce a portfolio value increase in a falling market.

We are talking here about the Foreign Exchange market known as FOREX. It is about six times bigger than the stock markets of the world and legitimately involves investment banks and central banks. Individual investors can get involved also. They can control large amounts of money by leveraging small sums.

Individual investors trading on FOREX lose nearly always.

A recent article in Investopedia is titled Ten Ways to Avoid Losing Money on Forex.

Without a doubt, the best way to “Avoid Losing Money on Forex” is not to get involved in the first place.

The best low-risk way to invest and grow rich is the Monday Morning Millionaire Program. If it is good enough for Warren Buffett’s estate, it is good enough for any of us.

Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me

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