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Byline: Carlise Peterson
CHICAGO - Some financial advisers are warning clients to beware of using retirement assets to engage in foreign-currency-exchange trading.
For even the most sophisticated investors, so-called forex trading can be a risky gambit. Now some companies that specialize in forex trading are targeting less sophisticated investors and encouraging them to put their retirement savings on the line.
Consider, for example, the forex individual retirement account, which burst on the scene about a year ago. Because its profits are not taxed, it's being billed as a way to trade currency without any tax consequences.
Meanwhile, other firms are advising investors to bypass the forex IRA altogether and set up a forex-trading account instead.
"We've definitely seen an increase in our clients' awareness of forex investing, and it's a concern because these programs are pretty compelling,'' said Howard Nadov, chief executive of Nadov Associates in Charlotte, N.C., which has $150 million in assets.
"It's not that all forex investing is bad - but the promises that are made can be astounding and, frankly, unbelievable at times. Retirement funds are not to be played with, and that seems to be what is suggested there,'' Mr. Nadov said.
Source: HighBeam Research, Forex trading come-ons gain currency; Investors encouraged to take...