Forex vs. Real Estate: What Should You Invest in?
In the year and a half since COVID-19 emerged, the world has slowly been working its way to economic recovery. However, with vaccination drives rolling out unevenly across the globe, the World Bank predicts that while developed countries will get back on their feet, albeit slowly, developing countries will get left behind. Though the global economy has been recovering steadily, it’s expected to be at a slow pace.
Consequently, the United Nations recommends that central banks the world over encourage investment to stimulate economic growth. Plus, with buying prices continuing to be lower than their pre-pandemic levels, there’s no better time to start.
Fortunately, there are a variety of investment vehicles that you can use to secure your financial success. To help you figure out where you should invest your hard-earned money, we’ll be comparing two of the most popular investment vehicles: forex and real estate.
With a daily trading volume of $6.6 trillion, forex, known as foreign exchange, is the largest and most liquid market in the world. As such, it’s incredibly appealing for investors who want to make a quick profit.
And though it’s true that its size makes forex a highly volatile market, that’s not necessarily a bad thing. After all, the more volatile a market is, the more opportunity you have to make a quick and hefty profit.
All you need are the right tools to discern insights from market trends. The volatility charts on FXCM can help you observe the movement of various market movers over various timeframes, allowing you to spot the best trade opportunities. Moreover, with the forex market open 24 hours a day and five days a week, you can easily sell off a currency that’s not performing as well as you’d hoped. This gives it an advantage over other investments that require willing buyers and lengthy negotiation processes.
You don’t need a lot of cash to start trading forex, either. Technically, there’s no legal minimum amount required to invest in forex, but you’re going to need to deposit a certain amount of cash as required by your chosen broker. Indeed, despite being relatively accessible to low-budget investors, forex has a few caveats that you need to be aware of. For one, you need to do your research and figure out how the forex market works if you want to find success in trading forex. It’s not something you can simply learn as you go, as it’s dependent on knowing the current trends in the market. In addition, you’ll need a good understanding of economics and financial indicators to avoid investing in risky currency pairs.
Meanwhile, investing in real estate is ideal if you want to commit to long-term investments. In real estate, your assets increase in value over time, allowing you to make massive returns in the future. In fact, AP reports that the US market is the hottest it’s been in years, with nearly half of all houses on the market selling above their list price. To cash in on this trend, consider either selling, renting, or leasing your assets. These are all good ways to generate passive income — all while your property accumulates value over time.
It’s also easier to find buyers or renters for your property thanks to various apps and platforms such as Zoopla and Rightmove. However, the process of selling your property can still be onerous and lengthy. Fortunately, since the definition of investment in real estate is broad, there’s a wide range of investments to choose from. That being said, you’re likely to find a method that meets all your criteria.
Aside from selling or renting property, you can invest in residential or commercial properties. You can also invest in real estate investment trusts or REITs. These are the shares on a stock exchange of companies that own commercial properties, like hotels and malls. On the other hand, you can choose to simply invest in raw land.
However, if you’re looking to invest on a large scale, consider wholesaling real estate properties. This involves buying properties in bulk and thus requiring a large amount of capital, so it may not be for everyone. If you have the funds to start, our article on the ‘Pros and Cons of Wholesaling Real Estate Properties’ points out that any initial investments you make will be lower than average, and the sale of all purchased properties will reward you with a hefty ROI in the long run. As an added bonus, you won’t have to worry about owner maintenance and repair when purchasing properties, either.
Both forex and real estate can help you achieve financial success down the line. However, the investment you do choose will depend on your investment goals and the strategies you want to implement to achieve them.
For instance, forex is more suited for short-term investors who don’t have a lot of disposable income to start with. Existing infrastructure, which is decentralized and available remotely, makes trading more convenient, and the wealth of tools you can use to supplement your trading strategies makes dabbling in the market easier and more accessible to more people.
Meanwhile, real estate is a better investment for people who are in it for the long haul and have more money to spare. Investing in real estate can give you a stable source of passive income, protect you against inflation, and diversify your portfolio. And despite the steep learning curve, the tips, advice, and comprehensive guides we offer here on Real Estaterr can help you get started.
Whichever you choose, however, be sure to do your due diligence first so you can manage your risk and make significant returns.