This episode of MarketLife continues Episode 3‘s discussion of the markets and asset classes people trade and invest in.
Markets for trading and investing (Part 2)
- Currencies
- Currencies can be quoted against USD or other currencies
- Largest markets in the world–this is both good and bad
- Brokers are not always transparent and it can be hard to understand commission costs
- Interest rates (differentials), inflation, balance of trade, public debt, political stability
- Indexes & Funds
- Often traded as Exchange Traded Products, but can also be futures
- Composed of other “things”
- Do you know what is in your index?
- Some are simple
- Some are actively managed
- May behave differently than the individual components
- Usually have a cost associated with them, “baked in”.
- Bonds
- You are loaning money to an entity when you buy a bond
- Consider who or what that entity is: country, town or city, or company
- Interest rates, inflation, credit risk
- Other “things”
- Real estate
- Private equity
- Insurance
- Exotics
- (Note: I did not cover CFD’s because they are not accessible to US investors.)
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Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic singer-songwriter. He has a new CD out, Out of the City (or here, on iTunes) that you might enjoy!
Enjoy the show:
