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FOREX vs. STOCKS

A brief recounting of recent stock history reveals the inherent problems with the stock market:

To fight recession in 2001, the federal government cut interest rate eleven times. The high volatility of interest rates has remained constant throughout this year. Although the interest rate has remained unchanged for 7 months, some members of the federal committee are pushing for a rate cut. The current Federal Interest lending rate for U.S. overnight banks is only 1.75 percent, reaching the lowest levels than 40 years. Following the attacks of September 11, 2001, the Michigan Sentiment Index dove to the lowest level since 1993. However, this fall in customer confidence index does not necessarily result in cautious customers. It is also greatly dependent on employment levels. Job growth has remained stagnant all year, following the application of nearly 1.8 million job cuts between April 2001 and April 2002. It is worried that the unemployment rate may soon rise. Some analysts argue that these claims may be exaggerated, but it is wise to be cautious and reconstruct an entirely new stock portfolio with such a volatile market.

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