by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Active Retirees : Active Retirees Feb-March 2012
Active RetireesTM | 41 finAnCE T he Australian dollar has had a tumultuous year. It has become a ‘risk currency’, this year trading as high as 110 cents and as low as 94 cents against the US dollar. “Whenever traders feel like taking a risk or being bullish, they turn to the Australian dollar,” says Phil Horner, a trading analyst at AxiTrader. “And if they’re not feeling confident, then they sell the ‘Aussie’.” Investors – disappointed with returns from other assets including shares – are increasingly being lured by the action and volatility of foreign exchange (forex) markets. “People are tired of the share market,” says Horner. “It’s not going anywhere.” A raft of brokers and educators are also heavily promoting the benefits of forex trading, such as the ability to make money in rising and falling markets, the large number of markets on offer, volatility, and the ability to use huge leverage. But this doesn’t necessarily mean forex trading is a suitable asset investment for retirees primarily focused on funding their retirements. While there are opportunities, there are also pitfalls. Those looking to enter the high-stakes world of forex need to educate themselves fully, pick the right markets and, above all, be mindful of the risks of leverage. “Retirees entering this market without doing their research or understanding what they were doing would be taking massive risks,” says Alex Douglas, managing director at Interbank FX Australia. “I don’t want to scare people off, but at the same time you have to be realistic.” Knowing the market Foreign exchange is the largest and most liquid financial market in the world, with an annual turnover of four trillion dollars. In recent years, forex trading, particularly of the Australian dollar, has been growing in popularity. According to the Australian Foreign Exchange Committee, the average daily foreign exchange turnover in Australia increased by 14 per cent in the year to April 2011. Currencies are traded and priced against each other in pairs; the most common and widely quoted pair is the Australian dollar against the US dollar (AUD/USD). Forex traders can access roughly 20 or 30 currency pairs, depending on their brokers. » Foreign exchange trading can be a lucrative way to grow your wealth, especially given the current strength of the Australian dollar. However, potential investors must be aware of the risks, writes ben power. A matter of currency Retirees entering this market without doing their research would be taking massive risks. Thinkstock
Active Retirees Dec-Jan 2012
Active Retirees April-May 2012