“In investing, what is comfortable is rarely profitable.” – Robert Arnott

Are you a financial market trader, or are you looking at entering the market? It is fairly obvious by now that the current global socio-economic and geopolitical instability is here to stay, for the foreseeable future at any rate. Consequently, to navigate the complexities of the volatile global financial environment, it is critical that you take note of several important points before you start trading on any of the financial markets.

Important points to note about our world

The world’s countries are divided up into First-world as well as Third world or emerging market countries. In a nutshell, first-world countries are capitalist, industrialised, and developed countries. Their currencies also tend to be strong when measured against the other world currencies.

For example, one of the biggest first-world countries is currently the United States of America. The United Kingdom, on the other hand, has the strongest currency when compared to other nation’s currencies. In other words, the GBP is seen as the lowest-risk currency.

Third-world countries consist of the poorest countries in the world, and they are the least developed. An example of a few of the leading third-world countries are India, South Africa, and Brazil.

On a personal note,I try and keep track of what is happening in the world on a daily basis. Consequently,I wake up every morning hoping that a new global crisis has not flared up. Why? Well, unfortunately, these crises tend to have a substantial impact on the world’s financial markets.

South Africa

For example, it looks as the South African President is getting ready to fire the popular and fruitful finance minister. Consequently, the South African currency (ZAR) has dropped by about 4% in three days. Furthermore, speculation is once again rife that the country’s credit ratings will be downgraded to junk. The impending doom of the current finance minister has raised concerns about the viability of investing in both the ZAR and South African companies. Therefore, investors are selling the ZAR because it is considered too risky to hold which is driving the price down.