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Forex - Investing in the Euro after the Greek elections?

How do you expect this weekend's elections in Greece to impact the Euro / USD?

Jun 19, 2012 by Cyrus from Tampa, FL in  |  Flag
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4 votes

No one really knows the answer to your question. What we do know that investing in currency is usually a bet for one and against another. So your odds may seem like 50-50 but consider that more often than not you are not betting against an average investor like yourself rather you are probably betting against institutional investors; Soros, banks, etc. Also these institutions often hedge their bets as well. If you want to bet with your money trade on the Forex at your own risk. Better yet go to Vegas and have some fun!

Comment   |  Flag   |  Jun 19, 2012 from Cleveland, OH

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George Cones, JD Level 20

Jeffrey is right. FOREX investing is used for hedging, for example, to take risk out of a contract to deliver goods or raw materials . Betting on FOREX is like any other speculative venture, you may win or lose, but the house always takes its share.

Comment   |  Flag   |  Jun 19, 2012 from Wilmington, DE

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Let me present it to you like this. You don't see very many old currency traders. With very few exceptions, they tend to burn out young and quit the business. The shot-termism and the wild volatility take their toll on you over time. Frankly, currency trading is bad for your health.

There are still quite a few gentlemen actively practicing in the money management business in their 80s or 90s. Warren Buffett and Charlie Munger are now in their 80s. Irving Kahn is 106 years old and still goes to work every day.

What do the old timers have in common? They follow a value approach and tend to have long time horizons. They are not opposed to placing big bets with their capital, but they tend to not use leverage. And no, currency trading is not a big part of their practice.

Will the euro rally if Europe's leaders form a coherent plan to fix the Eurozone? Probably. But good luck trying to time that trade.

If you are determined to have exposure to the euro, be smart about it. There is no harm in having some portion of your cash savings in assorted non-dollar currencies, including euros, and there is nothing wrong with holding bonds denominated in euros. But I wouldn't recommend trying your luck trading currency futures. Not unless you have a good supply of Tums for the inevitable heartburn that will come.

Comment   |  Flag   |  Jun 20, 2012 from Dallas, TX

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Fulton J. Wood Level 5

No one really knows, but the vast majority of bets being made are for the euro to drop against the USD. Then again, when everyone is on the same side of the boat, you know what happens.

Comment   |  Flag   |  Jan 28, 2015

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Several things can affect currency movements. I wouldn't personally want to be long the Euro versus USD as they have weaker economic growth, lower interest rates, and more political risk.

Comment   |  Flag   |  Jun 25, 2015 from Austin, TX

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