Many people are considering taking out loans to finance capital market investments. It should be weighed well whether the money should be used for the purchase of shares or for the financing of financial bets.
Whether betting or buying, stock prices should always be kept in mind.
The current situation on the capital markets
Although the German stock index Dax is still rising at the moment, the upside potential is likely in view of the impending euro crisis and a deteriorating global economy
be limited. There may even be a stronger correction down soon. More promising is a financial bet on undervalued currencies.
The pure financial bet in the form of leverage certificates and warrants
Particularly high profits promise currency bets with leverage, so leverage certificates and warrants. But since the lever also works in the other direction, high losses are threatened in case of mis-speculation. Investors who want to take this risky path should focus on currencies that are fundamentally undervalued on the one hand and on the other hand, in the coming summer months, more demand due to vacation. In this context, the Turkish lira and the Hungarian forint should be mentioned.
The interest-rate-cushioned currency
Investors who shy away from risky products can bet on a combination of expected currency gains and high interest rates. From today’s perspective, bond funds or overnight money interest certificates appear attractive to the Turkish or Brazilian currency. Both currencies have about 10 to 15 percent upside potential and interest rates in both countries are relatively high for healthy national budgets and intact financial markets.
Good profits do not exist without a certain risk. In the overall assessment, currency speculation appears more attractive than equity investments. Depending on your appetite for risk, leveraged currency bets or interest rate products based on foreign currency can be used. If you are looking for more information on the topic of financial bets, you should click here, because a good search in advance can significantly reduce the risk of losing an invested loan.