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Now You Can Easily Buy Foreign Currencies |
Mark Meyerowitz,Owner,
Meyerowitz Investment Management
Mr. Meyerowitz has been investing since high
school, in the 1970s.
After graduating from Brandeis University in 1977; Mark built up his small family business into a large local retailing company.
From the mid 1990s to early 2003, Mark was a broker with Smith Barney and with Edward Jones; two of the largest invest firms in the nation.
Mark and his family have lived in West Orange, NJ since 1987.
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 Have
you ever wanted to own a foreign currency as an investment
vehicle? Until now, there were a couple of ways of doing this.
First, you could go to your bank and ask them to buy the currency
for you and have the money sit in an account somewhere. The
problem was that the fees were high, and you needed a ton
of money to make the transaction worthwhile. This option was
good for commerce, but cumbersome for investors.
A second option, geared to individuals, is to open a brokerage
account with a foreign currency broker. Needless to say, the
lingo in the business needs getting used to. But more than
that, the accounts are highly leveraged, which means a small
deposit could lead to huge gains or huge losses. In view of
the way these brokers are always looking for new accounts,
I suspect that most individuals lose their trading capital
and disappear.
Now a third option is available: buying or shorting currencies
on a cash basis via Exchange Traded Funds and Exchange Traded
Notes. Barclays Capital, the wholesaler of iShares (www.ishares.com)
has just made available vehicles that own Japanese Yen, British
pound sterling, and the Euro. All three are coupled against
the U.S. dollar.
If one is interested in currencies, it is important to be
accurately interpret price charts (pattern recognition) as
well as fundamental data. Some currencies are trending up
or down, while others are in trading ranges.
Because the iShares are not leveraged, an investor could easily
get bored by the short term performance of the currency. An
investor needs to have a fairly decent long term horizon to
give the investment time to pay off.
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