Currencies: A Liquid MarketAn investment in a currency fund avoids a lot of potential problems that traditional investment funds face when there are liquidity problems in the market, as we saw during the height of the banking crisis toward the end of 2008. The currency market is highly liquid – as the graph below illustrates, in excess of $4 trillion in foreign currencies is traded every day, compared with $945 billion on the US Bond Market, and only $47 billion on the New York Stock Exchange. Managed Forex Accounts only invest in the spot currency market, and in the event of significant market turmoil, it can easily liquidate any position it holds very quickly, and at a very low transaction cost.
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