subject: Forex or Real Estate – Which one is the better investment opportunity? [print this page] Forex or Real Estate Which one is the better investment opportunity?
Rather than rambling about nonsense, I will get straight to the answer to the question posed in the topic is forex the market to invest into or is Real Estate better? After years of experience, research and being involved with both markets for quite some time, the answer, as in all other cases is SPREAD YOUR RISKS. Consider these basic guidelines;
Real Estate is a long term investment option while forex is short term
Funds required and Trading costs in real estate are much bigger than in the forex trading business
The forex market has a unique ability called SHORTING.
Forex is the right market for the short term investor. If you want to have a constant monthly source of income, passive rent income from property cannot be challenged. But if your preference is earning on capital gains (buying and selling property quickly to earn the difference) then the foreign exchange market should be the preference. As far as profiteering is concerned, there is no real difference in the two investment types. It really depends on how well you do the trade. The point is that you have to identify what suits you and consider the intricacies of whichever market you select to trade in. You would have to consider technical and fundamental analysis charts, jargon, currency trading software and other aspects which affect the highly volatile forex market. Likewise, every property will have location, construction, number of rooms and bathrooms, rent, lawyers, brokers and other aspects which affect a property's price.
Funds required in forex trading are definitely low. You can get started with a mini forex account with just $50 - $200. In the real estate sector, you require a minimum of 10% of the cost of the property you want to buy, in order for a bank to finance the remaining 90%. That small 10% amounts to at least a five figure numerical value without the limiting dot. Forex on the other hand is totally liquid, it operates around the clock and the intermediaries are brokerage houses and banks who are quite completely trustable. Such joys are not associated to property trading. But for greater investment and greater risk, the real estate market offers great rewards too and the added advantage of the stability of property compared to currency which changes every second. Thousands to millions can be minted with one good property trade and such joys are not associated to the forex market.
There is one unique aspect about foreign exchange trading you can perform a trade called shorting'. This means that let us say , you have bought a currency to sell at a higher price but your calculation backfires and the currency's value drops down. With shorting, you can quickly exchange your currency for another and exchange back again to sell when the values have risen.
