When it comes to investing in foreign currency, it’s good to equip yourself with how to play. Do not you have to lose money because of a petty mistake.
For example, you can not distinguish between the sale value and the purchase price of the currency. In addition, there are other mandatory things that you must really understand.
Here are 10 mandatory things you need to know about currency investing:
1. Know the different buying and selling rates
If you calculate the exchange rate, then you should see it from the bank side. For example, you have rupiah money and want to trade it with yen. So, you need to pay attention to the selling rate. This selling rate becomes the price the bank uses when selling the yen.
Different again if you have a yen and plan to exchange it with rupiah. So, what you should pay attention to is the buying rate. The value of this buying rate is a benchmark for the bank when buying yen money that you have. The core point to remember is that the value of the selling rate is always higher than the buying rate.
2. Learn how to play currency investment
Before you start investing, you must learn how to make a profit. For example with dollar investment. You decide to buy dollars for price 111.6. When the dollar reaches the price of 120.6, you can sell it for a profit.
So you can make a profit by buying dollars at a low value and selling them again when the value is up.
3. See the condition of money
Money conditions need to be considered when planning for foreign currency investment. See if you keep it in a safe place. Make sure also if the money is not crumpled, exposed to water, torn or folded.
If you keep the dollar for too long, the condition can turn yellow. It is very likely that the money will be rejected by the bank or its value drops drastically with imperfect conditions.
4. Avoid saving money for too long
Though you have to wait to sell the money when the value rises, as much as possible not to save money too long. The ideal time to save money is 12 months. So, always check the value of the exchange rate throughout the day so that money deposits can be exchanged immediately.
5. Be more careful when choosing the type of investment
Choosing an investment based on a financial profile is the safest way to start investing. From here, you know how much you can afford to risk. Meanwhile, for beginner investors, can start with a small dollar investment.
Avoid open a dollar account because the risk is greater. Consider also for other investments in the form of bonds, mutual funds, stocks and others.
6. Select a trusted currency sale place
There are two places you can go to the transaction of currency buying and money changer and bank. However, you should be more selective and consider profit and loss.
You should also know the credibility of the selected money changer. If lazy to find information about this, you can get counterfeit money or an uncompetitive exchange rate.
7. Compare the exchange rate in some places
The first thing you should do before exchanging money is check the exchange rate at the money changer or the target bank. Thus, you can get the best exchange rate. It is worth noting that exchange rates can change at any time, you know.
You should contact your bank immediately if you find a suitable price. If you are good at negotiating, you can lock the price on the spot. Just after that, you go to the bank to exchange money.
8. Understand the type and excess currency
The different types of currencies you can choose to invest are dollars, Singapore dollars, krone (Norway), Australian dollars, Swiss franc (Swiss), and yuan (China). This currency is the exchange rate is often strong and stable enough.
And one more, the Singapore dollar became the world’s strongest exchange rate, at 6.6 percent compared to the US dollar. You will also be able to profit bigger.
9. Exchange rate tends to fluctuate
You must understand very well that the exchange rate can rise and fall suddenly. Currently it could be a good rate, but conditions can change a few minutes later. Quite difficult indeed to guess the exchange rate. This is evidenced by the case of the monetary crisis in 1998.
Typically, the exchange rate is affected by business changes, world crises, government policies, investors, and so on. So, you are required to be smart in reading trends in order to make a profit.
10. Set clear targets
Ask yourself, what exactly is the purpose of investing the currency. If you already have a goal, then you are easier to start investing. Can know what kind of investment is appropriate and how it works.
Now, you are ready to plunge into the world of investment with armed with important information above. Let’s start investing in a wise way!