What do novices need to know before investing in foreign exchange?

Foreign exchange investment/


Generally speaking, the principal and interest of some foreign exchange investment products are higher than those of some professional banks. But for the sake of profit, banks usually give up part of the risk to investors. Therefore, once unexpected changes occur in the market, the interest return of investors may not be guaranteed, thus forming a situation of sharing risks and profits with banks.


Step 1: make clear your capital flow demand and risk preference.


According to their own capital flow demand and risk preference, determine the suitable product term and the corresponding period of financial products. If the fund is to be used within a certain period of time, it shall be invested in the products whose maturity date coincides with the scheduled time. If the foreign exchange fund has no fixed purpose, it can choose the products with a longer term. If the investment idea is more conservative, those who like fixed income will invest in fixed income products; if the investment idea is more personalized, those who like higher income will invest in floating income products; if they like both, some funds can be invested in fixed income products and some in floating income products.


Step 2: read the relevant provisions to determine whether it is a fixed income product or a range linked product, and have a thorough understanding of the risks in financial products.


For example, "cumulative income" often appears in the terms of fixed income financial products, which is only a relative concept for investors. Only when the term of the product is clear, can we really calculate whether the return of the product to investors is high enough. In addition, there are also some range linked products, some of which have very narrow range design, but the yield promised by the bank is very high in the range. In this way, you need to have more exchange rate knowledge and experience in foreign exchange speculation, otherwise most of the expected returns may fail. Foreign exchange experts from the Bank of East Asia told reporters that to choose a range linked financial product, we must properly consider the investment period, linked tools and the limited amplitude of the product, and combine these three factors with the final rate of return to weigh whether the product you want to buy can match the risk you expect to bear.


At present, most foreign banks launch foreign exchange financial products linked to the overseas market. Generally speaking, they keep the principal, but at the same time, their income fluctuates. We should be aware of the risks. According to the statistics of Shanghai Banking Regulatory Bureau, the number of complaints about personal financial products of foreign banks has increased in recent months, especially some disputes over long-term financial products.


At the same time, we also need to pay attention to whether the interest and service charge of the customer's mortgage can belong to the tax base.


Step 3: investors should pay more attention to some financial market information, such as the future trend of US dollar interest rate, so as to deepen their knowledge of foreign exchange financial derivatives. Before purchasing, it is better to find some people in the industry to have a clear understanding.


[disclaimer] the publication of this article by finance managers for the purpose of transmitting more information does not mean that they agree with their views or confirm their descriptions. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk

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