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If your relative is serious enough to put in many hours learning forex, i would choose that over penny stocks any day of the week. Due to its huge size, the forex market is the most efficient in the world, and lends itself well to technical analysis techniques - you can go to elitetrader.com or other trading sites, buy a ton of books about the subject, and do some serious studying.
try things out with some practice accounts, buy metastock or neuroshell, or tradestation, work on his strategies, and play around until he feels confident to put in enough money and play for real.
This is not an easy thing to do, and it is a FULL time job - trading is one of the hardest skills to master and if he isn't going to put his ass to work learning it then he might as well go to vegas and bet on black.
If he wants to learn without risking a ton of his cash, he can apply to be a proprietary trader at any number of firms (most deal w/ equities though). I did this for a while, and made some good returns (I put 5k down, spent months learning at a desk, traded 250k, ended up making 40k that year...though I didn't do well enough to keep at it too long)- but I also worked my ass off and viewed it as a job, not a casino.
It is very possible to make large returns as a trader - but not if you aren't willing to put in the work... then you are just flushing money down the drain.
If he's not, he should just build a well diversified and balanced fund - how much $$$$ did he get? After taking into consideration inflation, fees, etc - you should be able to take out 4% a year for life and have the portfolio keep its same relative value over time. For every 1M you have, that's an extra 40k you can take out a year...
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I'd rather be rich than stupid.
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