With the new scenario created during the pandemic and the ongoing military conflicts in the current region of Ukraine, problems such as inflation have affected all countries and forced many small and medium-sized investors to rethink their strategies and financial activities. Their power to get your money.At the same time, as financial literacy continues to evolve through new trading platforms and social networks, and a variety of investment options, FOREX appears to be working. Currency trades are frequent for pairs all the time.
But we all know that the value of currencies (dollars, euros, pounds and many other currencies) fluctuates following political events or economic factors. At this point, Brazilian investors should be cautious, as interest rates are particularly volatile in foreign markets.
At the end of the Great Recession or after a short period of recession, rates may be raised to control inflation and stimulate credit in the economy and, conversely, as was the case during the pandemic, rates may be lowered to stimulate and ease measures during periods of weakness.
Higher interest rates create more demand for money, which in turn encourages people to buy more, increasing the amount of capital coming in from abroad. On the other hand, lower interest rates reduce capital inflows and reduce inflation. This is why, when setting price action, it is important to stay up to date with upcoming central bank interest rate announcements, which reflects the reactions of market participants and allows us to conclude that it is the best choice to invest in. .
However, if you know for yourself, investment professionals always recommend diversifying investment sources, which means that a trader should always consider different types of assets such as stock exchanges, Forex market, commodities or virtual currencies.
As the first reference link recommends: “a balanced portfolio is actually a clear indicator that high-risk assets should be allocated to smaller asset classes. For example, a combination of shareholders and FIIs results in good diversification in Brazil. With the rise of ETFs, the portfolio segment is suffering from the aforementioned risks.”
When investing in stocks, a stock index such as the S&P 500 or Nasdaq offers a high return on an annualized basis, but the returns are relatively low: even if the investor is wealthy. Not getting huge returns, he ends up with less than a fraction of the money invested.
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Anyone who has more or less money to start investing must work hard to increase their assets: they must study the market according to their needs, use different platforms and software to assess the risk and return of the market, as well as learn how banks set interest rates.
To work in the foreign exchange market, as well as in the stock market, you can hire an agency or broker focused on working with your money, which will keep you informed about the main concepts that govern the market and how it moves. . It is always better to know the exact data or ratios that your broker or agency will tell you.