Archive for July, 2015

The Advantages of the Foreign Exchange Market

July 20, 2015

Versed in software development and investing, Pablo Soria de Lachica serves as director of business development at BForex. At the currency trading firm, Pablo Soria de Lachica applies his expertise in market analysis and investing to help develop software aimed at investors across a broad range of skill levels.

Forex, short for “foreign exchange,” is the business of trading one currency for another. While forex trading carries risks, just like all types of trades, it also includes numerous advantages. First and foremost, the forex market remains open for 24 hours a day, every Sunday through Friday. This means that traders have access to up-to-the-minute prices all day, enabling them to position themselves for optimal trades the moment they are ready to make them.

The forex market also makes it easy to understand the price of trades. Forex trades are quoted according to two currencies: a base currency and a counter currency. Shown in pairs, the base corresponds to the currency on the left, and the counter to the currency on the right. For instance, EUR/USD lists the value of the euro to the US dollar.

Investors buy a currency pair if they believe the base currency stands a chance of strengthening against the counter currency. Similarly, investors will typically sell if forecasts call for a pair’s base currency to weaken against the counter currency.

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Common Risks in Investments

July 7, 2015

In 2008, Pablo Soria de Lachica accepted the role of director of business development at BForex, a currency trading firm. Prior to joining BForex, Pablo Soria de Lachicha studied market research and market analysis at Universidad Tecnologica de Mexico, graduating with a master of business administration.

Investments often fall into one of four risk categories: market, default, inflation, or mortality. Market risk is perhaps the most common type of risk, as well as the broadest category. Stocks, investments in single companies, and bonds are just a few products that depend on the health of the market. Should the market crash, the investment’s performance could plummet. Investments also follow market trends, which can trigger beneficial or adverse results.

Default risk concerns the quality of an underlying investment, such as a single company’s bond. Investors profit alongside the company, but if the company defaults, the investment likely will fail to produce a return.

Inflation risk has to do with the average rise of inflation. Financial planners assume 3 percent to 4 percent inflation per year over extended periods. Should inflation risk be any higher, investors can expect low returns on investments.

Any investments that only pay out while the investor is alive may not pay out enough to support the investor and balance out fees and premiums, making them mortality risks. Investors should stagger short- and long-term investments to juggle expenses while working and to support themselves during retirement.