This is a lousy time to be in cash in the United States – interest rates are dropping fast and the value of the dollar is declining even faster. Individual investors can’t really play with the big guys when it comes to trying to make money on a low interest environment and a falling dollar. These are dangerous waters and the chances of loosing lots of money are as great as making it. In fact, it’s not fair competition. But there are new ways of getting into currencies and gold, and that level the playing field for the small investor, that are well worth considering.
The rise and popularity of ETFs (exchange traded funds) now make it possible for anyone to participate in currency fluctuations and in gold, even when prices are high. While gold has surged in recent weeks, there are a number of ETFs where buying puts and calls can reap major returns. Similarly, there are a whole lot of ETFs where one can take a position of single currencies or bundles of currencies. The New York Times ran a very good article on this which shows the breadth of opportunities and choices (http://www.nytimes.com/2007/09/30/business/yourmoney/30invest.html?_r=1&ref=todayspaper&oref=slogin). The opportunities to bet on currencies are really quite interesting at this time – and just as importantly, really available to any and all investors.
So, don’t sit around bemoaning the drop in the value of the dollar. This is the time to make some real money.
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Are ETFs Driving Late-Day Turns? by ktexas - Dec 15, 2008
ETFs: A Better Bet in a Bear Market by ktexas - Feb 26, 2009
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