Most investors I talk with are panicking. Greece is a whole lot of trouble, and now it's Italy that's the major concern as the interest rate on bonds now exceed 7 percent. People now talk about a reasonably bailout in Italy.
I would not be so sure about it. For many reasons, no one really wants either Greece or Italy to default. Surely a default would mean bad news for a lot of banks, but it could also mean a global loss in the world's economy. As if the growth was not slow enough nowdays in developed countries …
So where do I invest my portfolio in such hard times? Stock markets are volatile and even though I do believe stocks are the best long-term investment, you've got to think twice before you buy right now. Stocks might be cheap, but they could go even cheaper.
What about bonds? Government bonds are safe, right? Well some are. If you're talking about United States or Canada, you most likely will get your money back, but you will not get such a high return since these two countries are highly graduated. You could always buy bonds from Greece and get a double digit rate, but I'll be honest: personally, I've got trouble sleeping with Greek debt in my portfolio.
To be perfectly fair, there are quite many ways to make money, and the more risks you take the more money you might earn. Let's just quote the many forms of derivatives that exist; They're risky, they're sometimes hard to understand but they do offer you an opportunity to speculate!
As an experienced investor, I usually only use derivatives for hedging or cover to some risk. However, in an uncertain period such as these last months, I like to get away from the stock market a little so I have enough liquidities to trade and make money when other investors are temporarily looking for ways to keep it safe and cut their losses.
The question you probably have now is: "Where or what do you trade?" Answer: FOREX. What's the forex? Some of you might have heard the name, others might be familiar with it already, but forex stands for foreign currency exchange, and it is the most traded over-the-counter market in the world. It offers you high liquidity, fast trade execution and high leverage.
Now trading currency pairs is not something you can learn to do in an hour. You need knowledge and experience.