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    FX Investment - What Are The Risks?

    Foreign Currency Investment definitely carries a higher risk than many asset based investments. But the liquidity of the investment and the high potential returns does make it a very attractive investment option. With trillions worth of currencies traded every day on the Forex markets, by banks, investment companies and individuals. Whatever size investor you are, the Forex market is the most popular and now a very easily accessible investment option.

    There are two main factors to consider in the risk assessment of Foreign Currency Investing;

    1. Leverage - Using too high a leverage on currency purchases, so that a large shift in any pair can wipe a huge amount off the value of your investment. A low leverage reduces this risk greatly.

    2. Worldwide Disasters - Either natural or man-made, that can happen at any time around the world. From earthquakes and floods to terrorist attacks or wars. Some events can cause such a dramatic drop in the value of a particular currency that it is sometimes too fast for any fail safe 'stop loses' to limit your exposure. Again wiping out a huge amount of your investment or, in some cases, even all of it.

    Limiting Risk

    City FX Investment minimises these risks by firstly trading at a low and manageable 20:1 leverage which means that shifts in currency pair values do not cause a major problem to our trading model. Secondly, we ensure currency investments are spread evenly across the most stable currencies. These currencies will fluctuate, but should not completely collapse, in the event of disasters. Plus our traders are keyed in to world events, so they can action any defensive trading plan ahead of any widespread trader panic.

    Even with all of these safeguards and 24/7 investment management, foreign currency investment is still a high risk option. With our trading model, in the very worst case scenario you could actually lose 40-60% of your investment or not make the returns hoped for. Sound investment advice would be to only risk a small percentage of your portfolio in this investment area, unless you are happy to weigh a higher risk on your portfolio for greater returns. With this risk in mind, banks around the world trade and generate profits from currencies every day and City FX Investment can make investors an excellent return year on year on their currency investments.

    Peace of Mind Investing

    City FX follows simple rules to create a stable high yield return and give flexibility to your investment. After the initial minimum investment term investors can withdraw their full investment or extend for shorter periods of time to maximise on any pending market movements.

    In addition we offer the ability to view the currencies held, the weekly value and the target return of your investment, in your own Transparent Investing™ Account. We believe investors should be able to see exactly what is happening with their money, so you can see what decisions our traders are making with your investment. Even though we know sometimes you may not agree with some of the decisions made, we still prefer an open, transparent policy.

    Our investment advisers are also on hand by phone or by email if you have any questions. Or if you want to see a bit more before you invest, you can open a free account and see more information about each of our investment options.


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