Henry: I intend trading with currencies and signing up with iForex.com. What do you advise?
Maya replies:
Currency trading is probably the closest you can get to gambling when it comes to markets. Short-term currency movements are mostly driven by sentiment rather than fundamentals.
So firstly, make sure you know what you are doing, and secondly, this should form a very small part of your overall investment portfolio.
There are thousands of currency trading sites like iForex.com, so I cannot comment on that particular site, but a quick Google search produced quite a few negative comments, although this could be because people lost money not knowing the risks of currency trading.
Perhaps start with a small investment and test it out first.
If you are a South African you would have to use your foreign investment allowance (get permission to take money offshore) to invest via iForex.com. A better option would be to trade currency futures or currency warrants on the JSE, which is not in contravention of our exchange controls and you can invest with rands. Any profit on short-term trading is considered as income for tax purposes.