There are some short and long term investment strategies.
But there is no special criteria to categorize the investment strategies into two completely separate groups of short and long term.
A short term investment can simply become long term, when it is making profit and you want to hold the position for a longer period of time.
Here in this article, I am sharing the basics of a great investment strategy that is the combination of currency and real estate markets investments.
Currency market always gives us great opportunities to invest and increase our wealth.
However, if we learn how to combine our currency market and real estate investments, then we will make a lot more profit both in short and long term, without having to do anything extra.
First, I explain how this investment strategy is in general.
And then I will give you some examples to understand the strategy better.
Our Currency/Real Estate Investment Strategy
This strong and low risk investment strategy that works both in long and short term, has four important phases.
Later in this article, I will tell you why this investment strategy has a very low risk and a high success rate.
So, here is the four phases:
1. Locate a Strong Trade Setup on the Currency Market
You should locate strong trade setups or buy/sell signals on the long time-frames on the currency market.
By long time-frames, I mean the monthly time-frame.
In this investment strategy, even the weekly time-frame is too short.
Although this is going to be a short term investment at the beginning, and then it becomes long term if it works, still you have to look for the strong trade setups on the monthly time-frame which is the longest.
To help you understand this better, I am going to refer you to one of the other articles I published long time ago.
In that article, I have explained how one of my friends turned 2,000,000 euros into 2,540,916 in 38 months (€540,000 profit in 38 months).
Here is the article: Monthly Time-Frame Is the King
Now, something which is so interesting to know is that, he made that profit only through his currency market investment.
But here I am going to show you how to combine a currency trading opportunity that I have described in that article, with a real estate investment.
This can literally make your profit a lot bigger.
Now, let me explain what I mean by locating the strong setups.
a) How to Locate the Strong Trade Setups
To locate the strong trade setups on the currency market, you have to be a professional and experienced currency trader.
If you are not, then you have to ask a professional and experienced currency trader to show you the strong opportunities on currency market that can make some reasonable and big amounts of profit.
These kinds of strong investment opportunities don’t form on the currency market every day, specially when you are looking for them on the monthly time-frame (which is what you have to do if you want to follow this investment strategy).
They form sometimes once every year or even once every a few years.
But the good thing is that, you will have a lot of time to get ready for them.
The reason is that, as the monthly time-frame is so long, sometimes you know that the trade setups are forming several months before they fully form.
Therefore, you will have a lot of time to get ready to follow your investment strategy.
Second, once the setup forms, you still have a lot of time to take actions and do your investment.
If you are not a professional currency trader and you can’t analyze and locate the strong investment opportunities on your own, and if you don’t know any professional currency trader who helps you with this, you can follow us on this site.
We usually share the strong trade setups that form on the longer time-frames like monthly.
We have been doing this since several years ago.
You can follow us to pursue this investment strategy to increase your capital every a few to few years if lucky.
b) The Example of a Current Investment Opportunity
It is several months that New Zealand Dollar’s or NZD’s value has reached the maximum level it has ever made against Canadian Dollar or CAD.
What does this mean?
NZD to CAD exchange rate was used to go up.
It finally reached 0.9776 in April 1997.
Follow this in the below chart.
After that, it started going down constantly.
Finally it reached 0.5938 in August 2000.
Since August 2000, the NZD/CAD exchange rate has been going up and down between these two levels: 0.9776 and 0.5938
Each market is like a tank.
It has a special capacity.
This capacity can become smaller or larger under some very special conditions that rarely happen.
It means the maximum capacity of the NZD/CAD is between 0.9776 and 0.5938.
This market can’t go beyond or below these levels, unless some special and big changes occur in the economy of either New Zealand or Canada or both.
This is so unlikely however, because these countries have stable, strong and controlled economies, and sudden and unexpected changes can hardly happen in them.
c) What Does This Mean to You as an Investor?
It is very simple:
- You buy NZD against CAD if this market reaches the lowest level at 0.5938.
- You sell NZD against CAD if this market reaches the highest level at 0.9776.
This is the first part of your investment strategy that has to be done on the currency market.
As I mentioned above, it is several months that NZD/CAD has reached the highest levels at 0.9776.
It has even broken above it somehow, but it was just an attempt that failed.
NZD/CAD went down after that and closed below 0.9776.
It means NZD/CAD can never go higher than 0.9776 at least for now.
However, a market can’t keep on staying at the same level for good.
If it can’t go higher, it will collapse finally.
This is something that we expect now.
It is the right time to sell NZD against CAD.
So, this is what you have to do if you like to take this investment opportunity now, according to the investment strategy I am teaching here in this article:
- If you have NZD in your bank account, you can convert it to CAD now.
- If you don’t have NZD, but you still want to take this investment opportunity, then you can buy some CAD to convert it to NZD later when NZD/CAD goes down reasonably.
d) Risk Management in Our Investment Strategy
The amount of the money you invest, depends on your financial situation.
You are not going to lose your whole capital in this investment (I will tell you why later in this article).
But loss is always one part of the game in any investment.
Risk management is an important part of any long or short term investment strategy.
So be careful.
Buying or selling a currency against another one, based on a strong trading opportunity on the monthly time-frame is the first phase of this investment strategy.
You can make a lot of profit by completing the first phase (as I showed you how my friend did it).
However, the second phase is very important.
First, it can increase your investment success rate a lot.
It increases your profit dramatically, while you almost don’t have to do anything extra.
Second, it dramatically lowers your risk and safeguards your capital.
I will tell you why. Please keep reading 🙂
2. Invest in a Proper Real Estate Market
Now, let’s say you have converted your NZD to CAD.
So you have some Canadian Dollars.
If you wanted to follow just the first phase, then you would have to hold your CAD as long as NZD value kept on going down against CAD.
Then, when NZD went down reasonably (for example for 2000 pips at least), you would convert your CAD to NZD.
That would be the end of your investment that was limited to the currency market investment only.
But, as I mentioned above, doing the first phase limits your profit a lot. It will also increase your risk, because it is possible that NZD doesn’t go down against CAD, or it even goes up (although I explained that this is so unlikely, but anything is possible in this world and on the currency market, and there is always a probability for anything.)
So, although taking the second phase is not a must to make profit in this investment strategy, it is very important and I strongly recommend you to do it.
This is what you have to do:
a) Buy a Real Estate Property with the Currency You Are Holding
When you convert a currency to another one to do the first phase of your investment, then you have to buy a real estate property with the currency you are holding.
In our example, you’ve converted NZD to CAD.
Or, you’ve bought CAD because you didn’t have any NZD already.
Now, you have to buy some real estate properties in Canada with your Canadian Dollar to do the second phase of our investment strategy.
Any country, has some good and appreciating real estate markets.
For example, the Toronto real estate market is so hot and strong.
The prices are going up consistently there.
In many parts of Toronto, the prices are already too high, so that it is not affordable for many of the investors to buy any properties there.
However, you can buy some properties in the new areas close to Toronto.
Prices are still low in those areas, but will go up a while after the areas become popular.
Depend on the area, it usually takes a few to few years to see a significant and reasonable appreciation.
So, you buy some properties based on your investment ability, and you hold the properties.
You have to consult with some honest and well-known real estate brokers and agents who master the real estate market of that area.
You don’t have to rush.
Spend enough time to find the best areas and the properties with the best prices.
Make sure there is a high probability that the prices go up in that area in future.
Don’t invest your money in the areas that are already expensive and the prices have stopped going up.
This is not that hard to do, if you find and consult some good and honest real estate agents there.
b) Hold the Real Estate Property
You should hold the property(ies) as long as the first currency (NZD in our example) goes down against the second currency (CAD in our example).
You can even rent your properties to generate some passive income through them.
This is an investment after all.
Maximizing your profit is an important part of your investment strategy.
So do you best to maximize your profit.
This is something that helps you become rich faster and easier.
How Long Do You Have to Hold Your Properties?
Although NZD/CAD is at its highest level now, and so we expect it to collapse sooner or later, it is never clear whether it will really collapse, when it will collapse, and how low it will go after it starts going down.
Therefore, you should hold and rent your properties until NZD goes reasonably down against CAD.
The distance between the highest (0.9776) and the lowest (0.9574), is 3,636 pips.
However, it is possible that NZD/CAD never reaches that low in the next several years.
Therefore, you can hold your properties until NZD goes down for 2000 to 2500 pips.
So when NZD/CAD reaches around the 0.7700 level, you can think about selling your properties.
c) Sell Your Real Estate Properties
When the currency market rates tell you that it is time to sell your properties (as I explained above), then you have to check a few things.
First, check the real estate prices to see how they have changed.
Have your properties prices moved up, or they are still at the same level?
If they have moved up reasonably, you can sell your properties.
However, you can still hold them if there is still a chance that they go higher.
You have to consult your real estate agents for this.
I prefer to sell when I see that the price has moved up reasonably.
The reason is that I usually need my capital to take the other investment opportunities and repeat the same investment strategy over and over again.
I hold my properties in case I have enough money to take some other investments and there is still the chance that my properties’ prices go higher.
However, there is another probability: It is possible that NZD turns around and starts going up, so that you will lose your profit.
These are all the factors that you have to consider.
If there is another good investment opportunity forming on the charts, you can collect your profit to get ready for that investment.
If you have good passive income through renting your properties, you can hold them.
At least you can hold the ones that are doing good, both in their rental income and in price appreciation.
This is an investment strategy after all.
You have to consult, think and decide.
d) Leave the Real Estate Market
If you decide to sell your initial real estate properties, then you will have your money back to your pocket again.
For example, if you sell the properties you have bought in Canada, then you will have Canadian Dollars.
Now the question is what you should you do with that.
That is a very important question.
Indeed, it is another important step in your investment.
When you sell your real estate properties, it means you leave the real estate market to enter the currency market again, in your investment journey.
3. Convert Your Money Back to the First Currency
Now that the value of the first currency has changed reasonably against the first currency, you can convert the currency you’ve got through selling your real estate properties, back to the first currency to collect your profit.
In our example, you should convert the Canadian Dollar you’ve got through selling your real estate properties in Canada, to New Zealand Dollar.
Now it is time to give you an example with numbers:
Let’s say you converted $300,000 NZD to CAD at the first phase and when it was the right time to do this conversion and when the NZD/CAD rate was 0.9423. Therefore, you got $282,690 CAD:
$300,000 NZD x 0.9423 = $282,690 CAD
You invested this $282,690 CAD in Canada’s real estate market.
You hold the properties until NZD value went down against CAD for 2000 pips and the NZD/CAD reached 0.7423.
Now, I want to assume that there was a 10% appreciation in the value of your properties during this period.
Therefore, you will get $310,959 CAD if you sell your properties:
$282,690 CAD x 10% = $28,269 CAD
$28,269 CAD + $282,690 CAD = $310,959 CAD
Now that the NZD/CAD rate is decreased to 0.7423, you will get $418,912 NZD if you convert your $310,959 Canadian Dollar to New Zealand Dollar:
1 / 0.7423 = 1.3471
$310,959 CAD x 1.3471 = $418,892 NZD
Therefore, your profit in New Zealand Dollar is $118,892 in this investment so far:
$418,892 NZD – $300,000 NZD = $118,892 NZD
Am I right?
I didn’t include the money you could make through renting your properties, otherwise your profit would be a lot more.
4. Invest in Real Estate Market Again
Now you can invest your NZD capital in New Zealand real estate market.
You have to consider the same rules for your real estate investment in this case too.
In case you do it when NZD reaches the lowest or close to the lowest level against CAD, then chances are it reverses and goes up against CAD while you are holding your New Zealand real estate properties.
That means you can repeat the above process and make more profit.
We are done!
That was how my investment strategy works.
It can be a short term investment strategy if you hold your properties for a short time.
But you should never sell your properties in less than 2 years.
It can be a long term investment strategy, if you hold your properties for a longer time and keep on renting them.
Why Is This Investment Strategy Safe and Secure?
There is a risk in any investment.
But you can always lower your risk as much as possible.
In the above investment strategy, when you buy the real estate properties with your capital and in a good and strong real estate market, it means you secure your investment against the unexpected currency market movements.
The reason is that chances are the value of your real estate properties goes up while the currency market goes against you.
Even if it doesn’t, the value of your real estate properties never becomes zero.
Therefore, you don’t lose your shirt and most part of your capital will still remain safe.
However, if you don’t buy any properties, you are always at the risk of losing a lot because of the sudden and strong currency market movements.
God forbids if you trade with leverage and through a retail Forex brokers, then in case of sudden and strong currency market movements, you can not only lose all your capital and wipe out your account, but also you can end up with a negative balance which is your liability to pay to the broker.
The Importance of the Real Estate Investment
When you invest your money in the real estate market to follow the second phase of this investment strategy, you not only make profit through the market appreciation, but also you can make money through renting your properties.
That is why I said that the real estate investment is a very important part of this investment strategy.
The real estate investment is something that pure currency and stock traders don’t do.
That is why they usually lose a lot of money because of the unexpected and sudden price movements and in the currency or stock markets crash.
Are you ready to follow this strong and secure investment strategy?
Then follow us on this site to be always aware of the best investment opportunities on the currency and stock markets.
You can also learn a lot of other things from us.
That helps you join our millionaire club and become a multi-millionaire finally.