Posts Tagged ‘PAMM’

10.02.2012 Post in Trading

Once we have got some spare money, we start considering profitable investment methods. There are several alternatives to choose from: bank account, trust management, real estate, financial markets.

Depositing to a bank account is frequently preferred by investors as it is risk-free. Investing in a bank account does not require any special skills of capital management, it is very simple: you just go to a bank, leave your money on an account and watch your deposit accumulating interest. But yet there are a series of restrictions to remember about. Firstly, interest rates hardly run over inflation, which means that you gain almost no return as such. Secondly, as a rule, high interest is accrued on large deposits. But unfortunately, you might not have a sum with many zeroes at the end. Thirdly, such deposits are typically uwithdrawable either totally or partially; apparently, it is not convenient.

investAnother variant of investment is open-end funds based on the trust management principle. This way of investing funds carries more risks than the abovementioned one: no profitability is guaranteed, moreover, you could not receive the investment back. In addition, in case with open-end funds, an investor cannot influence the process of money management: after the shares are purchased, your money is managed by someone else, not you. The liquidity of shares is low too. In case with trust management, you have a strategy developed exclusively for you and you are still able to influence the process. Mind that the minimum capital of a customer is to be over 1000 USD. Both open-end funds and trust managers charge a certain commission for their work.

Forex offers trust management service as well within the framework of the PAMM system. The minimum deposit required is 1 USD and the return can be withdrawn at any moment.

Real estate is also a rather favourable sector to invest in. However not everyone can afford such an expensive purchase. Real estate items can be leased or sold at much of a profit. Profitable dealing with real estate takes profound knowledge of the housing market, thorough search for tenants or buyers, negotiating, consulting with specialists and months of waiting for an increase in housing prices.

Entering Forex requires less money than purchasing a real estate item. As for the working process, it is plain. Trades of any volume are carried out promptly anytime. There are sellers and buyers in various parts of the world every minute.

And the last way of investment we are going to dwell on is the stock market where securities are traded. “Securities” is a term used to loosely describe stocks, bonds and derivatives etc, i.e. documents that represent evidence of ownership of a certain asset. On the stock market profit is only gained when the rate is on increase. Margin trading is not held here which means that you cannot use a leverage to make trades more effective. Trading hours on the stock market are determined by those of a corresponding stock exchange.

Liquidity of currency operations is higher than liquidity of those with securities. Unlike stock exchanges, Forex has no specific location and is open 24 hours a day.

There are other investment alternatives of course. Your choice depends on your financial resources and analytical skills. Investment in Forex appears to have many advantages, including high liquidity, continuous trading process, enticing minimum deposit required, leverage, profits on both a bearish market and a bullish one.

It is worth noting however that the rest of investment ways, except for bank account, imply some risks. That is why, it is so important to develop your skills of market analysis and capital management.

Added by Denis Minenkov,
InstaForex Clients’ relationship manager