A Bond Investment Or FOREX Investment, Who is more effective

Investing in bonds and the savings bank is safe as we will see. But if you are adventurous you can make a great deal from Forex.

The article is written primarily for the smaller investor who needs high yield, the man who has between, let us say, $5,000 and $100,000. If the $5,000 investor secures a return on his money not of 3%, or $150 per year, but 12% $600 per year his benefit will be material, not nominal.

If the $100,000 investor receives not $3,000 but $12,000 the difference is great enough to mean complete financial independence.

While theoretically the large investor, the one with $1,000,000 and up, does not need to consider forex investments, because his $1,000,000 in the savings bank yields him $30,000 a year, or his investment in tax free bonds at 4% yields him $40,000 a year not subject to income tax, strangely enough this is the type of investor who invests the most heavily in the riskier opportunities. Some of the very largest aggregations of capital in the world do little other than invest in mortgages at discounts, foreign loans, real estate syndications and investment partnerships.

Strange as it may seem, the person least satisfied with a low yield is often the very wealthy person. There may very well be a good reason behind the saying that the rich get richer and the poor get poorer. The rich may know how to invest more intelligently with more information available to them.

In a stable economy we might consider high rate investments as desirable but not necessary. But we are not in a stable economy. We are in an economy in which every year our fund of savings is worth less. Dollars in themselves mean little. They have meaning only insofar as they can purchase goods and services. Let us see how this purchasing power of the dollar fared since the end of the war.

With 1947-1949 equal to 100%, consumer prices rose to 102.8% in 1950. If we consider that at this point in history 1950 we have $102 in the savings bank at 3% interest we can get a strikingly clear idea of savings in a period of inflation.
By 1960 in 10 years consumer prices had risen to 126.5%.

Now if the $102 in the bank in 1950 drew 3% interest, after a hypothetical tax of 33%, the owner of the $102 savings account would find by 1960 his account had grown to $122. His interest didn't even enable him to keep up with inflation. He was actually poorer in 1960 than he was in 1950.

If a person were in the 50% tax bracket 4% compounded annually would amount to the same thing. He would have $122 in 1960, the same amount that the person in the 33% bracket would have with his return of 3%.

Although Forex is much more risky you stand to gain a lot more, but remember that you should not risk more than you can afford to lose

Why Forex Is A Great Trade

The Forex market seems to be one of the hottest markets right now.

Let’s take a look why

It takes small amount of capital to get going and you get leverage with it.

This is important because a lot of people entering the market are looking for ways to make money and not just to invest their spare cash.

Leverage means that you can use other people’s money to make your investment bigger. Not to try to scare you but this also introduces greater chance for Loss. This is not for the faint hearted or people not willing to learn how to trade, understand their trading phycology and follow money management rules. Having been duly warned please keep reading about the great potential and positive aspects of Forex trading.

Leverage is a very powerful tool to make money very quickly.

The Forex Market is the largest in the world worth more than a Trillion dollars a day. This is important for many reasons:

It provides amazing liquidity. There are always people ready to buy and sell so you can always enter and exit your position easily. Smaller markets may not always give you the ability to exit your trade so easily.

It is difficult for larger players to influence the market. In the stock market the larger players can influence a particular stock and cause movement just by their trades.

The sun is always shining somewhere.

There is always trading going on 24 hours a day Monday to Friday. It goes from city to city following the sun. Plus you still get your weekends of to relax. With stocks the markets closes and news is released and the stock can gap at the open leaving you in a worse position. When you can trade a very liquid market open 24 Hours it makes it a whole lot easier to manage your positions and relax.

You are trading so that you can have a better life right?, not just stuck in front of a computer. It is important to get clear on why you are trading or you can just be just swapping one situation for another and not really improving your life. Pep talk over with let’s get on with it.

Volatility

Stocks may go in sideways movements and suddenly rush up or down and there are a lot of stocks to choose from. Sure there is some stocks renown for being volatile but it is easier to find consistent volatility in the Forex market. The market is always moving so there are always plenty of opportunities for day trading

So I obviously think that the Forex Market provides great opportunity for people to enrich their lives. It gives people willing to learn a little a great lifestyle that many will envy.

I hope that you enjoyed that simple summary. There are many more great reasons to trade forex

Types Of Forex Trading

Forex trading has become the "it" game in the economic market. People are starting to take notice and get into the program. This is perhaps because of the way the internet has made forex trading so convenient with sites mushrooming all over the world wide web.

Forex trading involves the exchange or the buying and selling of currencies or foreign money. It is used by many as an alternative to stock investing because currencies are money and are therefore more liquid. Companies also prefer dealing with forex trading for their side investments perhaps because they will have need for the currency should they decide to expand to other countries.

There are different types of forex trading that are being done in the market. They may seem at a glance, similar to each other, but they are actually not. Each has different advantages and disadvantages that a sharp forex trader should know.

Traditional Forex Trading

This involves buying a currency at a lower rate and then selling it for a higher price or exchanging it for another currency when the exchange rates go up.

Spread Betting

This is perhaps the most commonly done trading type in the world even if it is vastly different from the way forex trading is done. Spread betting does not involve any buying and selling but as it names suggests betting. A person will bet that a currency for instance will either appreciate or depreciate. When he wins, he earns money. This may seem like gambling but despite its image, a lot of people feel that it is a good way to earn from the forex trading without really risking much.

Day Trading

Quite well known, day trading is the most notorious of the types of forex trading. This involves the buying and selling of currencies but only for a day. A lot of people feel that it can be really risky but on a good day, you can yield great results in the end. Still, despite this, many experts in the industry shun this method of trading.

Auto Trading

As the name suggests is a kind wherein the forex trading happens automatically. That is why it is also called robotic trading. What happens here is a person will invest in an auto trader platform that will have automatic execution depending on its analysis. This can save someone money from paying percentages in commission and transaction fees. However, some people are not comfortable dealing with automaton.

How To Avoid The Pitfalls Of Forex Trading

Forex trading has become the "it" game in the economic market. People are starting to take notice and get into the program. This is perhaps because of the way the internet has made forex trading so convenient with sites mushrooming all over the world wide web.

Forex trading involves the exchange or the buying and selling of currencies or foreign money. It is used by many as an alternative to stock investing because currencies are money and are therefore more liquid. Companies also prefer dealing with forex trading for their side investments perhaps because they will have need for the currency should they decide to expand to other countries.

There are different types of forex trading that are being done in the market. They may seem at a glance, similar to each other, but they are actually not. Each has different advantages and disadvantages that a sharp forex trader should know.

Traditional Forex Trading

This involves buying a currency at a lower rate and then selling it for a higher price or exchanging it for another currency when the exchange rates go up.

Spread Betting

This is perhaps the most commonly done trading type in the world even if it is vastly different from the way forex trading is done. Spread betting does not involve any buying and selling but as it names suggests betting. A person will bet that a currency for instance will either appreciate or depreciate. When he wins, he earns money. This may seem like gambling but despite its image, a lot of people feel that it is a good way to earn from the forex trading without really risking much.

Day Trading

Quite well known, day trading is the most notorious of the types of forex trading. This involves the buying and selling of currencies but only for a day. A lot of people feel that it can be really risky but on a good day, you can yield great results in the end. Still, despite this, many experts in the industry shun this method of trading.

Auto Trading

As the name suggests is a kind wherein the forex trading happens automatically. That is why it is also called robotic trading. What happens here is a person will invest in an auto trader platform that will have automatic execution depending on its analysis. This can save someone money from paying percentages in commission and transaction fees. However, some people are not comfortable dealing with automaton.

Things to Do and Avoid in Forex

Being new to foreign exchange trading is not bad, but being ignorant about the do's and don'ts of forex trading can be truly devastating.

Forex trading can mean risking investments, but the results can be very rewarding and fulfilling.

Here are some vital do's and don't to consider in forex trading that can help you get on your way to making it good in the forex trading market, it is not gospel truth, but can do so much to help improve the odds to your favor.

Know how to exit from trades. It is just like gambling. If you place a trade and it's not working out for you, get out of it.
Don't complicate the mistake you made by staying in and hoping for a reversal of fortune. On the other hand, if you are venturing into a winning trade, don't talk yourself out of the position just because you are bored or want to relieve stress, stress is just a natural part of trading, so get used to it.

Avoid trading too short-term. If you are hoping to make less profit, don't undertake the trade, since the spread you are trading on will make the odds against you far too high and could be hard to overcome.

Keep it simple. Don't try to convince yourself in complicated processes, analyses or overpower yourself with market reports or statistical data. Just get the feel of the market, ask around and be smart enough to make a crucial decision.

Heads and tails. Not the gamble thing, but the tops and bottoms. Realistically, there are no real "bargains" in forex trading, rather, trade in the direction the price is going in and results will either improve or stacked in your favor.

Try to ignore the incomprehensible technical's. What you need to do is understand the key indicators of price action, whether over-extended long or short. Take note that spikes occur in the market when it is moving along. Just be cautious if the market is tranquil.

Emotional Trading. Without a strategy, your trade concepts are just thoughts and thoughts are emotions, which is a very poor foundation for trading.

Humanly speaking, when we are upset and emotional, we don't tend to make the wisest decisions.

Lastly, confidence comes from successful trading and time-tested experience. If you lost money early in your trading career, your tendency may be to think it too difficult to get back up to regain it.

But many forex trading experts would say, the trick is not to go off half-cocked, that is, learn the business before getting in.
Remember, knowing the do's and don'ts of forex trading is as important as the trading itself.

Bahraini dinar

The dinar (Arabic: دينار‎) (sign: .د.ب or BD; code: BHD) is the currency of Bahrain. The ISO 4217 currency code is BHD. It is divided into 1000 fils (فلس). The name dinar derives from the Roman denarius. The dinar was introduced in 1965, replacing the Gulf rupee at a rate of 10 rupees = 1 dinar. The Bahraini dinar is abbreviated .د.ب (Arabic) or BD (Latin). It is usually represented with three decimal places denoting the fils

Coins

In 1965, coins were introduced in denominations of 1, 5, 10, 25, 50 and 100 fils. The 1, 5 and 10 fils were struck in bronze, with the others in cupro-nickel. The 1 fils coin was not produced after 1966 and no longer circulates. In 1992, brass replaced bronze in the 5 and 10 fils and a bimetallic 100 fils coin was introduced. A bimetallic 500 fils followed in 2000.

Banknotes

In 1965, The Bahrain Currency Board introduced notes in denominations of 100 fils, ¼, ½, 1, 5 and 10 dinar. In 1973, the Bahrain Monetary Agency took over production of paper money, issuing notes for ½, 1, 5, 10 and 20 dinar. In 2006, the Monetary Agency was renamed the Central Bank. On March 2, 2008, the Central Bank of Bahrain has released pictures of the new notes bearing its name in the local newspapers. The Central Bank stated that the new notes will be released shortly. The new notes will be used hand in hand with the old ones. The new notes also feature new images reflecting Bahrain's heritage as well as its modern development. Saudi riyals are also acceptable in Bahrain, with the exception of the Saudi 500 riyal note which is only accepted in major supermarkets, airports and electronic shops.

Japanese yen

The yen (円 en?) (sign: ¥; code: JPY) is the currency of Japan. It is the third most-traded currency in the foreign exchange market after United States dollar and the euro.[1] It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling. As is common when counting in East Asia, large quantities of yen are often counted in multiples of 10,000 (man, 万) in the same way as values in Western countries are often quoted in thousands.

Pronunciation and etymology

The word en literally means "round object" in Japanese, as yuán does in Chinese, referring to the Imperial Chinese coins that were circular in shape and widely used in Japan up to the Tokugawa Period.[2] In 1695, the character 元 (ghen), signifying "round or rounded") was placed on the obverse of copper coins.[3]

The spelling and pronunciation "yen" is standard in English. This is because mainly English speakers who visited Japan at the end of the Edo era to the early Meiji era spelled words this way. In the 16th century, Japanese "e (エ)/we (ヱ)" had been pronounced [je] and Portuguese missionaries had spelled them that way. Some time thereafter, by the middle of the 18th century, "e/we" came to be pronounced [e] as in modern Japanese, although some regions retain the [je] pronunciation. Walter Henry Medhurst, who had not come to Japan and interviewed some Japanese in Batavia (Jakarta), spelled some "e"s as "ye" in his An English and Japanese, and Japanese and English Vocabulary (1830).[4] In the early Meiji era, James Curtis Hepburn, following Medhurst, spelled all "e"s as "ye" in his A Japanese and English dictionary (1st ed. 1867). That was the first full-scale Japanese-English/English-Japanese dictionary, which had a strong influence on Westerners in Japan and probably prompted the spelling "yen". Hepburn revised all "ye"s to "e" in the 3rd edition (1886) in order to mirror the contemporary pronunciation, except "yen". This was probably already fixed and have remained so ever since.[5]
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History
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Introduction

The yen was officially adopted by the Meiji government in an Act signed on May 10, 1871.[6] The new currency, in the form of a silver coin similar to the contemporary Mexican Peso, was gradually introduced beginning from July of that year. The yen replaced Tokugawa coinage, a complex monetary system of the Edo period based on the mon. The New Currency Act of 1871 stipulated the adoption of the decimal accounting system of yen (1, 圓), sen (1⁄100, 錢), and rin (1⁄1000, 厘), with the coins being round and cast as in the West. The yen was legally defined as 0.78 troy ounces (24.26 g) of pure silver, or 1.5 grams of pure gold. The same amount of silver is worth about 1181 modern yen,[7] while the same amount of gold is worth about 4715 yen.[8] The Act also moved Japan onto the gold standard. (The sen and the rin were eventually taken out of circulation at the end of 1953.[9])
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Fixed value of the yen to the US dollar

The yen lost most of its value during and after World War II. After a period of instability, in 1949, the value of the yen was fixed at ¥360 per US$1 through a United States plan, which was part of the Bretton Woods System, to stabilize prices in the Japanese economy. That exchange rate was maintained until 1971, when the United States abandoned the gold standard, which had been a key element of the Bretton Woods System, and imposed a 10 percent surcharge on imports, setting in motion changes that eventually led to floating exchange rates in 1973.
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Undervalued yen

By 1971 the yen had become undervalued. Japanese exports were costing too little in international markets, and imports from abroad were costing the Japanese too much. This undervaluation was reflected in the current account balance, which had risen from the deficits of the early 1960s to a then-large surplus of U.S. $5.8 billion in 1971. The belief that the yen, and several other major currencies, were undervalued motivated the United States' actions in 1971.
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Yen and major currencies float

Following the United States' measures to devalue the dollar in the summer of 1971, the Japanese government agreed to a new, fixed exchange rate as part of the Smithsonian Agreement, signed at the end of the year. This agreement set the exchange rate at ¥308 per US$1. However, the new fixed rates of the Smithsonian Agreement were difficult to maintain in the face of supply and demand pressures in the foreign-exchange market. In early 1973, the rates were abandoned, and the major nations of the world allowed their currencies to float.
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Japanese government intervention in the currency market

In the 1970s, Japanese government and business people were very concerned that a rise in the value of the yen would hurt export growth by making Japanese products less competitive and would damage the industrial base. The government therefore continued to intervene heavily in foreign-exchange marketing (buying or selling dollars), even after the 1973 decision to allow the yen to float.

Despite intervention, market pressures caused the yen to continue climbing in value, peaking temporarily at an average of ¥271 per US$1 in 1973 before the impact of the 1973 oil crisis was felt. The increased costs of imported oil caused the yen to depreciate to a range of ¥290 to ¥300 between 1974 and 1976. The re-emergence of trade surpluses drove the yen back up to ¥211 in 1978. This currency strengthening was again reversed by the second oil shock in 1979, with the yen dropping to ¥227 by 1980.
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Yen in the early 1980s

During the first half of the 1980s, the yen failed to rise in value even though current account surpluses returned and grew quickly. From ¥ens 221 in 1981, the average value of the yen actually dropped to ¥ens 239 in 1985. The rise in the current account surplus generated stronger demand for yen in foreign-exchange markets, but this trade-related demand for yen was offset by other factors. A wide differential in interest rates, with United States interest rates much higher than those in Japan, and the continuing moves to deregulate the international flow of capital, led to a large net outflow of capital from Japan. This capital flow increased the supply of yen in foreign-exchange markets, as Japanese investors changed their yen for other currencies (mainly dollars) to invest overseas. This kept the yen weak relative to the dollar and fostered the rapid rise in the Japanese trade surplus that took place in the 1980s.
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Effect of the Plaza Accord

In 1985 a dramatic change began. Finance officials from major nations signed an agreement (the Plaza Accord) affirming that the dollar was overvalued (and, therefore, the yen undervalued). This agreement, and shifting supply and demand pressures in the markets, led to a rapid rise in the value of the yen. From its average of ¥239 per US$1 in 1985, the yen rose to a peak of ¥128 in 1988, virtually doubling its value relative to the dollar. After declining somewhat in 1989 and 1990, it reached a new high of ¥123 to US$1 in December 1992. In April 1995, the yen hit a peak of under 80 yen per dollar, temporarily making Japan's economy nearly the size of the US.
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Post-bubble years

The yen declined during the Japanese asset price bubble and continued to do so afterwards, reaching a low of ¥134 to US$1 in February 2002. The Bank of Japan's policy of zero interest rates has discouraged yen investments, with the carry trade of investors borrowing yen and investing in better-paying currencies (thus further pushing down the yen) estimated to be as large as $1 trillion.[10] In February 2007, The Economist estimated that the yen is 15% undervalued against the dollar and as much as 40% undervalued against the euro. By February 2008, the yen had strengthened to 90 yen per U.S. Dollar.[11]
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Coins

A silver one-yen coin of 1870

Japanese 10 yen coin (obverse) showing Phoenix Hall of Byōdō-in

Coins were introduced in 1870. There were silver 5, 10, 20 and 50 sen and 1 yen, and gold 2, 5, 10 and 20 yen. Gold 1 yen were introduced in 1871, followed by copper 1 rin, ½, 1 and 2 sen in 1873.

Cupronickel 5 sen coins were introduced in 1889. In 1897, the silver 1 yen coin was demonetized and the sizes of the gold coins were reduced by 50%, with 5, 10 and 20 yen coins issued. In 1920, cupro-nickel 10 sen coins were introduced.

Production of silver coins ceased in 1938, after which a variety of base metals were used to produce 1, 5 and 10 sen coins during the Second World War. Clay 5 and 10 yen coins were produced in 1945 but not issued for circulation.

After the war, brass 50 yen, 1 and 5 yen were introduced between 1946 and 1948. In 1949, the current type of holed 5 yen was introduced, followed by bronze 10 yen (of the type still in circulation) in 1951.

Coins in denominations of less than 1 yen became invalid on December 31, 1953, following enforcement of the Small Currency Disposition and Fractional Rounding in Payments Act (小額通貨の整理及び支払金の端数計算に関する法律 Shōgaku tsūka no seiri oyobi shiharaikin no hasūkeisan ni kan suru hōritsu?).

In 1955, the current type of aluminium 1 yen was introduced, along with unholed, nickel 50 yen. In 1957, silver 100 yen pieces were introduced. These were replaced in 1967 by the current, cupro-nickel type, along with the holed 50 yen coin. In 1982, the first 500 yen coins were introduced.[12]

The date (expressed as the year in the reign of the current emperor) is on the reverse of all coins, and, in most cases, country name (through 1945, 大日本 or Dai Nippon, "Great Japan"; after 1945, 日本国, Nihon koku, "State of Japan") and the value in kanji is on the obverse, except for the present 5-yen coin where the country name is on the reverse.

As of September 4, 2009, 500 yen coins are the highest valued coins to be used regularly in the world (this place is typically taken by the 5 Cuban convertible peso coins), with values in the neighborhood of US$5.50, €3.90, £3.80 and CHF 5.80. The United States' largest-valued commonly-used coin (25¢) is worth ¥23; the Eurozone's largest (€2) is worth ¥255; the United Kingdom's largest (£2) is worth ¥260; and Switzerland's largest (CHF 5) is worth ¥430. Because of this high face value, the 500 yen has been a favorite target for counterfeiters. It was counterfeited to such an extent that in 2000 a new series of coins was issued with various security features. In spite of these changes, however, counterfeiting continues.

The 1 yen coin is made out of 100% aluminum.

On various occasions, commemorative coins are minted, often using gold and silver with face values as high as 100,000 yen.[13] The first of these were silver ¥100 and ¥1000 Summer Olympic coins issued for the 1964 games. Even though they can be used, they are treated as collectibles and normally do not circulate.

Instead of displaying the A.D. year of mintage like most nations' coins, yen coins instead display the year of the current emperor's reign. For example, a coin minted in 2009 would bear the date Heisei 21 (the 21st year of Emperor Akihito's reign).

Banknotes

A Series D 2000 yen note, featuring Shureimon
Main article: Banknotes of the Japanese yen

The issuance of the yen banknotes began in 1872, two years after the currency was introduced. Throughout its history, the denominations have ranged from 10 yen to 10000 yen.

Before and during World War II, various bodies issued banknotes in yen, such as the Ministry of Finance and the Imperial Japanese National Bank. The Allied forces also issued some notes shortly after the war. Since then, the Bank of Japan has been the exclusive note issuing authority. The bank has issued five series after World War II. Series E, the current series, consists of ¥1000, ¥2000, ¥5000, and ¥10,000.
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Determinants of value

Beginning in December 1931, Japan gradually shifted from the gold standard system to the managed currency system.[15]

The relative value of the yen is determined in foreign exchange markets by the economic forces of supply and demand. The supply of the yen in the market is governed by the desire of yen holders to exchange their yen for other currencies to purchase goods, services, or assets. The demand for the yen is governed by the desire of foreigners to buy goods and services in Japan and by their interest in investing in Japan (buying yen-denominated real and financial assets).

Since the 1990s, the Bank of Japan, the country's central bank, has kept interest rates low in order to spur economic growth. Short-term lending rates have responded to this monetary relaxation and fell from 3.7% to 1.3% between 1993 and 2008.[16] Low interest rates combined with a ready liquidity for the Yen prompted investors to borrow money in Japan and invest it in other countries (a practice known as carry trade). This has helped to keep the value of the Yen low compared to other currencies.