So i have done some researching online. What I have found is that all the biggest money managers and billionairs who are in fiance are all stock based. why is this?
there is more than $ 2 trillion everyday in the Fx market, and only $191 Billion in the stock market, yet stocks have proven to be more profitable career wise?!
Does this mean that stocks have more profit potential than FX, or simply (and hopefully), FX market is still under utilized with equal potential?
P.S checked out George Soros, Bruce Kovner, and Bill Lipshutz, they seems to be fading stars, who was eithe wasn’t that big in the first place, or like GS, is mainly into stox.
Any stock on average will increase in value over time. Buy and hold with some good value stocks, enough capital to invest and its easy to see its allot less work to make money in the long run with stocks. Its still takes work to find the good deals in the stock market and its still taking a risk. If you were managing a huge account you might be more comfortable with the slightly less risky market. Just my thoughts:D
yea that make sense, if i was a investor. trading currencies, i would be a buy and hold long term value investor while operating commodity or currency trading as my primary task.
FX alpha Plus of morgan stanley is a special division that trades currencies. their stock havent been doing too well
The argument I would give is that stocks have been more readily accessible as an investment than currencies. Even then, I think stocks will continue to be more dominant for the forseeable future, and the potential to overleverage will often times kill long term trades.
Read the whole article, not just the high points. It specifically says “The figures include gains and losses on currency contracts used to hedge positions in other parts of the trading portfolio, the filing said.”
You can’t judge their actual trading performance without first pulling out what was hedges on other positions.
As for all the big winners of history only being in stocks, I’d agree that we have a relatively short history of forex trading being a legitimate vehicle as compared to stocks, and even commodities. Also, the public is more well versed in stocks so the success stories most well circulated will tend to come from there.
On the subject “Any stock on average will increase in value over time” that is potentially a major misinterpretation of the facts. The stock indices have a long-run uptrend, but they do not reflect the average stock. Indices have a survivor bias - meaning constituent stocks are generally dumped before they go to zero, if they were even included in an index in the first place, and replaced with something that is virtually guaranteed to perform much better.
You are correct I was not very clear:o I still think if you bought 100 different stocks ten years from now chances are your portfolio would be worth more. If you took 100 open forex positions and held them for 10 years you would be lucky to break even.
I don’t agree with the original assumption. Currencies are a part of many successful managers’ portfolios. If you’re asking why successful managers don’t trade currencies exclusively, I would say that it’s difficult to properly diversify, hence be successful when you have so few instruments to trade. But I would bet that any of the guys you mentioned have at least one or two open positions in currencies.
