Forex trading takes place 24 hours a day and it basically involves all the currencies in the world. This means that Forex currency trading is bigger than all the stock markets in the world combined.
Thanks to time zone differences the currency markets are always open – when trading ends in Asia it starts in Europe.

Thanks to the incredible size of the Forex Market and its continues hype there are 5 things everyone should know before starting Forex Trading.

1. It is incredibly difficult

Forex traders agree that 90% of all traders lose money. 5% of traders break even and only 5% will make money.

2. You can make a lot of money

Forex brokers usually allow for a maximum leverage of 500:1. This means that with only a deposit of $1000 you can make transactions with up to $500,000 dollars.
If you make 1% profit this means that you make 5000 dollars.

That is a very nice sum when you started with only $1000.

3. You can lose everything almost instantly

High leverage means high risk. To continue the example above – If you have $1000 in your account and you are allowed to make transactions with $500,000 dollars and you lose 1% – this means a loss of 5000 dollars. This means that you will lose your 1000 dollars and will owe another 4000 dollars!
Thanks to the efforts of your broker your account will however most likely be closed as soon as you lose the 1000 dollars (that is -0.2%)

While there is potential for large gains there is an even larger likelihood of losing everything you have!

4.  No one has a working system

There are tons of people saying they have found a magic formula that helps to make money trading currencies 24/7. These people are usually selling their secret for a small sum because their biggest wish is to help you get rich! NOT!

This is marketing bullshit!

In reality these people have realized that they will never make any money with Forex. They are better off selling partially working systems and robots to people who want to get rich fast.
In reality these systems will always lose you money.

5. If someone has a working system he will keep it secret

If someone actually has a working system and makes money on trading currencies he will never reveal his secret.
This is true because of the way forex trading works – if enough people know of a certain way to make money the method will cease to work simply because a lot of people are trying to use it.

Once a year most of the worlds influential businessmen, politicians, investors and economists meet in Davos, Switzerland to discuss the current state of world economy. This yearly gathering is known as the World Economic Forum.

To give you an idea of how high-level Davos is, you should know that in addition to presidents and prime ministers, it is visited by all of the worlds major banking institutions – starting with the banks bailed out last year and finishing with the leaders of the central banks of USA, Europe and China.
Among this years attendees were more than 70 world leaders and over a hundred of the worlds most influential companies (the likes of ExxonMobil and Coca-Cola).

Main topic in the World Economic Forum

You don’t have to be a genius to figure out what they talked about this year – the economic crisis.

It was revealed by private equity giant Blackstone that the current economic downturn has destroyed over 40% of the world’s wealth during the last 5 quarters and that things are not getting better – they are only getting worse! The world will lose even more of its wealth!

Here are some of the things said during this years summit:

“Worrying about inflation now is like worrying about the measles when you might get the plague.”

Kenneth Rogoff  – Harvard professor and former chief economist of the International Monetary Fund

“The outlook is pretty grim. Things are not good and business surveys are coming out showing they’re getting even worse.”

Sir Howard Davies – London School of Economics

“Confidence grows as slowly as a coconut tree, and falls as fast as a coconut.”

Indian economist, Montek Singh Ahluwalia

“The free enterprise system has not failed; the financial system has failed.”

Tony Blair -Former British Prime Minister

“We cannot underestimate the challenges and the dangers that we face in 2009. We are in a global recession the likes of which we have never seen. But there is no quick fix.“

Stephen S. Roach, Chairman of Morgan Stanley Asia

“The crisis is getting worse. It’s going to take drastic action to turn it around, if it can be turned around, quickly. I believe it will take a long time.”

Rupert Murdoch – Chairman of News Corp

And from a more positive side:

“In times of recession there are massive opportunities and fortunes to be made, so for new up and coming entrepreneurs, this is the time to go and start a business.”

Richard Branson – Founder of The Virgin Group

I agree that things are indeed bad and they will probably get worse before getting better but among all these quotes I especially love the last one from Richard Branson.

The positivity of this serial entrepreneur and billionaire is what keeps the world running – a true businessman always looks to the future and thinks how he can use the mistakes done in the past to build a better business for tomorrow! As long as there are people like Richard Branson – we will be just fine!

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This is a detailed summary of what happened in finance in 2008.

2008 was one of the worst years in the financial markets after the Great Depression in the 1930-s.

Worst year for Dow Jones since 1931

The Dow Jones Industrial Average finished its third worst year throughout history and the worst year since 1931.

In 2008 Dow Jones was down 35%. This tremendous fall is only a bit better than the 37.7% fall in 1907 or the 53% fall in 1931.

Dow Jones -35%

Only 2 companies finished the year up

Only 2 of the 30 companies belonging to Dow Jones managed to finish the year on the positive side.

Wal-mart +16%

McDonalds +2%

Biggest losers in Dow Jones

The biggest losers in the Dow Jones Industrial Average were:

General Motors -86%

Citigroup -78%

Alcoa -73%

Bank of America -69%

American Express -66%

All but 3 of the world’s indexes finished down

The only indexes that finished the year up were:

Ghana +60.06%

Tunisia SE +10.4%

Ecuador +6.03%

3 world indexes that dropped the most

Iceland OMX 15  -94.43%

Bulgaria Sofix -79.71%

Ukraine PFTS -74.33%

Other important US indexes

Nasdaq Composite -41.6%
Russell 2000   -37%

Noteworthy sectors in USA

Radio -86%
Casinos and Hotels -83%
Real Estate -92%
Biotechnology   -0.5%
Medicine   -32%
Aviation -30%
Retail -26%
Defense -29%
Oil and Natural Gas -30%
Banks -49%
Insurance -51%

Commodities

Gold   +4%
Oil   -62%
Copper -58%
Coffee -20%
Natural Gas -22%
Orange Juice -50%
Wheat -25%
Silver -29%
Corn -14%

Notable world stock exchanges

Mexico BOLSA -24.09%

London FTSE 100 -31.23%

Sweden OMX 30 -38.75%

Germany DAX -40.37%

France CAC 40 -41.98%

Japan Nikkei 225 -42.12%

Denmark OMX -46.63%

Finland OMX 25 -49.65%

Hong Kong Hang Seng -48.27%

Estonia OMX -62.98%

China CSI 300 -65.95%

Russia RTS -72%

World Currency

Euro vs. British pound  +31%
Euro vs. Dollar -4.2%
British Pound vs. Dollar -26.7%
Dollar vs. Japanese Yen -19%

Conclusion

All in all 2008 was a really bad year for all kinds of investors. It did not matter whether you invested in the US, Europe, Asia, third world countries or whether you bought commodities and seeked to diversify your investment portfolio in order to keep the risks down.

2008 was equally bad for everyone – thanks to the credit crunch almost all the world markets were down. As usual – investors turned to gold for a safe haven.

It is difficult to say what 2009 will bring but investors are worried – it is expected that the financial crisis of 2008 will turn into the economic crisis of 2009.  Whatever you do – be very careful!

Have you heard the expression

“Money doesn’t smell”

Do you know where it comes from?

“Money does not smell” was first said by Roman Emperor Vespasian to his son Titus, when he ordered a new tax on public bathrooms (or toilets, as we say here in Europe).

What he probably meant was this:

“If you see an opportunity to make money – use it!

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A huge marketing campaign started across Europe today with the goal to save fuel, money and the environment.

Over 40 oil companies, 45 000 gas stations and 29 countries are taking part.

Here are 10 things the marketing campaign is recommending people to do.

1. Service your car and check the oil level regularly
2. Check tire pressure once a month
3. Take everything that you don’t need out of the trunk and from your back seat.
4. Close your car windows when you are driving fast
5. Only use the air conditioner when it’s absolutely necessary
6. Start driving soon after starting the engine and stop the motor if the car is not driving for more than 1 minute.
7. Drive with a reasonable speed and smoothly
8. When accelerating shift to a faster car as soon as possible (Most cars in Europe use the “stick”)
9. Try to sense what is going to happen in the traffic before it happens
10. Share your car with others.

If you ask me, these recommendations are quite simple and can even seem somewhat stupid to a person who knows a little about saving gas.

I have a feeling that Europe needs this campaign badly – the average gas price is about 8 to 9 dollars per gallon.

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If you are fed up with tips about how to save fuel you should check out this post

10 countries with cheapest gas prices in the world

Here is a top 10 list of worlds richest countries according to CIA World Factbook and Wikipedia measured by GDP per capita. For those in the dark – GDP or Gross Domestic Product – is the value of all the goods that a country produces. GDP per capita stands for the value an average person produces.

10. Switzerland – $39,800 (GDP per capita)

This cheese making country is considered to be one of the most neutral countries in the world. During World War 2, people from other European countries deposited their money in the banks of Switzerland, knowing that their money would be safer there than in their home countries. Some well known Swiss companies include Nestle, Logitech, Rolex and Credit Suisse.

9. Equatorial Guinea – $44,100

The Republic of Equatorial Guinea is a country in Central Africa. Most people have never heard of it. This country flew into stardom after 1996 when large oil reserves were found in the nation of only 0,5 million people. While being one of the largest producers of oil in Africa, little has been made to improve the living conditions of the people. Corruption is widespread and ordinary people are mostly living in poverty. The gap between rich and poor is probably the largest in the world.

8. Ireland - $45,600

This member of European Union has been often admired as one of the most modern knowledge economies in the world. Ireland is the largest maker of computer software in the world. A study done by The Economist ranked the Celtic Tiger to have the best quality of life in the world.

7. United States – $46,000

What sets the US apart from most other countries in this list is its size. While most other countries in this list are among the smallest in the world the US has a population of over 300 million and a total land area of 3,79 million square miles (9.83 million sq km). The US is also home to the largest amount of billionaires in the world. It is speculated that as many billionaires live in the US as in the rest of the world.

6. Singapore – $48,900

This tiny country consists of 63 island and some mainland with a total area of only 270 square miles (704 sq km). With Hong Kong, South Korea and Taiwan it is considered one of the Four Asian Tigers. Singapore has the busiest port in the world and is the 4th largest foreign exchange trading center in the world. Singapore is widely believed to be the most business-friendly economy in the world.

Page 2 – The Top 5 richest countries in the world