Forex trading has increased over the last few years. One reason for this is because of the rise of exposure to investors who now have more information at their fingertips than ever before.

The internet is largely responsible for the surge of investing information. It has shown the regular investor alternatives to grow wealth that were either unknown or simply unused previously.

What this means for Forex, short for the foreign exchange market, is that average people can invest in currencies previously traded mostly by large companies. But the question is, should you invest in forex?

1. Trades are on Paper Only

Trading of Forex is not regulated like futures or stocks. There is no governing body or clearing house to oversee trades or settle disagreements. Those who choose to trade Forex do it on agreements that are basically on paper only and recorded as computer transactions on the trader’s account.

Both parties have to agree to the exchange. What keeps them honest? Each should be a member of the National Futures Association, or NFA, which includes binding arbitration to help settle any disagreements. Those who even consider trading currencies should only do it through a firm who is a member of the NFA.

Trading takes place from 5 pm Eastern Standard Time on Sundays to 4 pm Eastern Standard Time on Friday and almost never has price gaps. In addition, there is really no such thing as insider trading. If you have a tip about a change in currency you can act on it without fear of repercussion.

2. No Commissions

With trading being done on paper only, there are no commissions in Forex trading. Dealers, not brokers, take on the risk in the trade and make money through the bid-ask spread. All gains are profits for the investor after the price clears the cost of the spread. However, scalping by dealers is rare and very difficult due to the nature of the trade.

3. Diversification

If trades are done on paper only with no commissions you may wonder why you should trade. One reason is because gains, or losses, made through the trade allow you to diversify your investments.

For example, if you feel the value of the U.S. dollar will drop you can trade for another currency that may rise instead. Some people fear that the dollar’s value will drop so they would prefer to have some currency of other another country whose currency is strong.

4. Appreciation

As the currency of another nation appreciates in value, your investment in that currency grows. Once you trade it again you will have made a profit.

Of course, there is risk that the value could also drop leaving you with a loss instead. This is why having an understanding of world events and their impacts on currency can be critical to trading Forex.

Newcomers to trading may find it a risky investment if they do not have knowledge of currency values. But if you are new to trading, try a virtual investment in Forex to get familiar with it before investing real money.

In the end, due to the volatility of some values of currency, Forex trading is mostly done by experts or those who understand the currency market.

Have you ever invested in Forex and if so, were you successful?

As the decade continues to unfold, a host of new trends are reshaping the face and future of the investment industry. Demographics are radically changing in many parts of the world, posing new and sometimes thorny challenges that must be met and adapted to in order to safeguard the future of the industry. One of the most pressing challenges comes in the form of an increasing gentrification among young clients, many of whom are dealing with an investment firm for the very first time in their lives.

Demographic Studies Confirm an Increasingly Younger Client Base

Demographic studies have shown that the client base of leading wealth management and investment firms is becoming ever younger. The total number of individuals who are currently in possession of $1 million dollars with which to invest is now 4.4 million, a number that represents an all-time record in the history of the industry. Meanwhile, the total amount of wealth that can be invested by this group has been estimated at $15.2 trillion dollars, another all-time high.

A Shift in Demographics Is Slowly Restructuring the Industry

Investment firms are thus pressed to find viable solutions to the issues faced by an increasingly younger and less experienced group of potential new clients. How can such companies cater to the needs of this new clientele while remaining faithful to their core principles and standard operating procedure? The issues raised by this new scenario have perplexed industry pundits and corporate CEO’s alike, and are sure to remain an ongoing source of productive speculation for many years to come.

The Retention of Customer Loyalty Is an Ongoing Industry Concern

One of the most crucial concerns that investment firms are going to have to grapple with in the very near future is the issue of customer loyalty. Most international firms, such as FI among others, have gotten used to a certain amount of long term customer loyalty. Many of these firms have based their long term corporate strategies on this basic assumption, and may thus be in for a rather rude awakening when they discover that younger customers are less likely to show such long term customer loyalty.

Customer Retention Strategies Are an At All Time Premium

As the direct result of such changing demographics, customer retention strategies are at an all-time premium. New strategies are being devised to retain customer loyalty to a single investment firm while also reassuring older customers that their continuing involvement in the company is being rewarded in the proper fashion. The revolutionary advent of Internet technology has enabled many investment firms to shift the emphasis of daily customer relations to an online basis, which has engaged these younger customers in a much more streamlined and direct manner.

New Strategies Are Being Devised To Deal with Online Clients

New strategies are being devised to deal with clients whose interaction with the company occurs almost wholly on a purely online basis. By engaging directly with these clients on their own terms, companies can increase the customer loyalty of this new breed of clientele by presenting them with informative content on a daily basis. The age of the fully interactive company website is now upon us, thanks to this new and emerging generation of investors.

So you’ve decided to start investing. Excellent. Investing is hands-down the best way to take the money you earn and use it to make more money, build wealth and finance an excellent future.

Before you begin investing however there are quite a few important questions that you need to answer, not the least of which is what type of investing you want to engage in. There are stocks of course, as well as bonds and mutual funds. You can also invest in an educational IRA or the 401(k) that your employer offers, or purchase an annuity.

You also need to keep in mind that, no matter what type of investment and investing plan you engage in, all of them come with a certain degree of risk. For example, the federal government doesn’t insure securities, even if you happen to purchase them through your bank or through a credit union, and if they lose money or fail you lose money.

With these things in mind, the following questions should all be answered, either by research that you perform or by a financial expert you consult with, before you begin investing. Enjoy.

What are your investing goals?

Are you investing to save money so that you can purchase a house? How about to finance your retirement? Whether you need money to pay for college for your children or create a “cushion” of money for when financial emergencies arise, you need to know as specifically as possible what your goals are before you begin investing.

How much time will pass before you get your invested money back?

If you purchase stocks, shares in mutual funds or bonds, you can sell them at any time. Of course, there’s no guarantee that you’ll get back the same amount of money that you paid for them, and you might just get back less. Other types of investments actually restrict you from getting your cash back for specific periods of time, including things like limited partnerships.

How much money can you earn on your investments?

When you purchase a bond you generally get a fixed amount of money in return. With securities however your earnings go up and down along with the market. Stocks do the same and, even though they might have done well before, most investments don’t comes with a guarantee of future earnings.

What is the risk involved in your investment?

As we mentioned earlier, investing is inherently risky. The risk is simply that the money you used to invest won’t be paid back to you, or the earnings that you thought you would make won’t come to fruition. There’s also a trade-off that you have to make; most investments with a higher potential for earnings have a higher risk, and vice versa.

Are you prepared to diversify your investments?

This one is relatively simple; if you have several different types of investments the chance that you’ll suffer a complete financial loss will be much lower than if you invest in only one or two. In other words, by placing your money in a number of different investments, your risk is greatly reduced.

What are the tax advantages of your particular investments?

Some investments have better tax advantages than others. For example, if you purchase US Savings Bonds, you won’t have to pay state and local taxes. Municipal bonds are the same, IRAs have tax advantages and Roth IRAs do too, but they’re a bit different. There are other tax-deferred investments that you can get for things like college and retirement as well, some of which let you postpone paying taxes and some of which eliminate them completely.

If you’ve just graduated college, most likely you have years of student loan debt to pay off. College expenses have risen faster than the rate of inflation and students are having to take out more loans to help pay for it. So, the question is, should you put off investing and focus on paying your debt for fear of a volatile market or risk it and potentially earn a big payoff if the market swings upward?

Well, it depends on your unique situation. Of course, if you’re struggling to pay your bills, then any money you earn should be directed toward all your debt. However, if you’ve developed a little bit of discretionary income and can afford your monthly loan payments, then why not send some money to an investment account? If you’re considering this option, here are a few tips that should help get you started in the investment game:

Buy Individual Stocks

Starting small in the stock market is obviously a great tactic as you begin to learn the ins and outs of investing. The most important thing to remember: there is money to be made in the stock market. For instance, if you were to purchase a few shares of Apple stock in 2004 which was valued at $16.25 and left it there, you’d be able to sell that at $614.13 ten years later. Likewise, Google’s stock in 2004 was $85 in ’04 and in 2014 was $500.

Newer tech stocks (social media, apps, etc) could have just as positive a future so if you can afford to purchase a few shares they might be worth a lot more years later. But of course, that’s all speculation and you should always do your own research when investing. Just practice your due diligence before investing any money regardless of industry and find a few stocks you believe will do well and watch the magic (knock on wood) happen.

Setup a Demo Investment Account

If you don’t want to risk any money whatsoever, it’s fairly easy to setup a demo account to see how you’d do in the stock market. You’ll be offered some fake money that can be used to hone your skills as an investor. These accounts are completely free and will help you gain necessary experience without losing any money.

You’ll also learn how to use the trading platform of a specific brokerage firm. A few firms offering this feature include Scottrade, Updown.com and OptionHouse. To take it a step further, if your fictitious account earns a nice return, you can frolic on a bed of monopoly money to enhance the illusion of the new cutting-edge investor you’ve become.

Learn to Save

When you’re committed to investing, one important discipline should be discussed. Saving. The money being put away in an investment account can’t be used for a night out at the movies or the latest game console. In order to have enough money to invest, you might need to find ways you can cut expenses. That means evaluating all your debts, including your student loan, and monthly expenses to find out what can be cut and by how much.

In some cases, you can even decrease the amount of interest owed on your student loan if you set-up automatic payments to be deducted from a bank account or have made timely monthly payments for a certain period. Many student loan lenders, in an effort to prevent students from consolidating their loans, will offer interest rate reductions to help keep their borrowers. Also, investing in the stock market should come after a solid 401k plan and a modest 3-month emergency fund.

Keep it Simple

Taking it slow and learning as you go will help you become a wise investor in no time. Besides, as with many things life, taking risks can result in huge rewards.

Lance enjoys writing about financial topics as well as posting tips on his blog EasyScholarshipsNow.com.