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  Why Diversify Your Investments?

The two greatest keys to having a successful portfolio are: (1) investments that are less correlated with each other; and (2) proper diversification.^* Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories. It aims to maximize return by investing into different areas that would each react differently to the same event.

The diversification of investments is not possible with investing in stocks alone, because almost all stocks are somewhat correlated. Bonds are also correlated strongly with stocks. As such, your portfolio should have some or all of the following:

• Savings for Emergencies
• Retirement Plans
• Stocks
• Bonds
• Real Estate
• Foreign Currency Exchange (Forex) Programs

Forex investment is a good addition to your stock investment.^*

In the 1990’s, many investors believed that investing in stocks alone would build a nice retirement in their 401(k), IRA, or investment account. This was true to a point. That point was reached in March of 2000, when the Stock Market crashed. It was neither the first crash, nor the last.

With the addition of a Forex account to their financial portfolios, investors are able to diversify, and thus lower risk. We have seen the US Dollar weakening during the past two years, while the Euro, Canadian Dollar, and Australian Dollar became stronger. A Forex account gives you additional possibilities to take advantage of the global financial market.

  Benefits of Portfolio Diversification with Forex Programs

• Most investor portfolios are heavily concentrated in the stock market and/or bond market.
• Most of the 8,000 mutual funds are highly correlated with each other and the market.
• Protecting yourself from the risks associated with investment concentration is important to your financial well being.
• The world’s largest market—the Foreign Exchange (Forex) market—has a daily volume of $1.5 trillion in US Dollar value.
• Forex is not closely correlated with the stock market, providing true diversification to lower your overall investment portfolio risk.
• Forex holds opportunities both in up and down markets.
• Forex is a true 24-hour market—open continuously from 5:00pm ET on Sunday till 5:00pm ET on Friday.
• Forext allows leverage as high as 100:1. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.
• No short selling restrictions in Forex—no zero uptick rule or any other restrictions against shorting positions.
• Low transaction costs in Forex trading—dealing spreads as low as 1 pip.