Best Currency Exchange Rates

Video Transcript

"I'm Roger Groh and this morning we're here to talk about best currency exchange rates. In other words, where can you make the most money. Or where might you lose the most. Well anybody go to business school? Anybody an economist out there? Well from our point of view, it makes sense to pay very much attention to the fundamentals of the currency in which you're investing. Meaning does that country bring in more money than they're spending? If the answer is yes, that they're bringing in more money than they're spending, then that's probably a pretty good country's currency to own. If the country is spending more money than they're bringing in, then that's probably a pretty good country to short. But here's how you make the most money. All countries go through long cycles maybe 5 years or 10 years, they're periods when they are spending more money than they are bringing in, they're currency weakens, weakens, weakens, sort of like the US dollar today, weakens, weakens, weakens and gradually though as the currency gets weaker exports pickup, they begin to bring in more cash than they're spending and at the point it becomes very attractive because you have a flip in there and you can then have a significant rapid movement in a currency. An example is the US dollar since August. And the US dollar peaked at about 159 to the Euro and bottomed at about 130 to the Euro, those are approximate numbers from August until today. And that's a tremendous move and the big thing here is that it has nothing to do with the stock market, there's nothing to do with the real estate market. So you've picked an asset class that trades for completely different reasons then real estate or stock. That's a big deal today because in all likelihood, real estate prices are going to continue to decline for quite a while from all of the data that we see and as a result it's very possible that the stock market will also continue to under perform. So if you want to make money, you want to be in something that's not correlated to the stock or real estate markets. Currency trading certainly is that."