is the German mark (deutchemark), which has been one of the world's strongest currencies since World War II, together with the Japanese yen, the British pound and the American dollar (Rebello C18). When trading in currency, the issue is one of whether the currency grows stronger against the currency of the investor, or weaker. For example, a trader might purchase marks when one dollar is equal to 1.5 marks. One hundred dollars would then purchase 150 marks. At some point in the future, the dollar might "fall" to 1.3 marks, at which point the same 100 dollars would purchase only 130 marks. However, if the investor had purchased 150 marks earlier with the 100 dollars, his investment would now be worth $115.50 because each mark is now worth more relative to the dollar.
Over the course of the six-week period, the dollar fell slightly, with a significant drop in the middle of October, followed by a slight recovery. The amount of profit which can be made with such movement can be great if the amount invested is significant. However, as the following chart illustrates, timing can be key to success in this area of investing. The following table and chart illustrates the performance of the mark against the dollar for the period in question (the chart is expressed in terms of marks per dollar):
If the investor had sold the marks for dollars the week of October 20, a handsome profit could have been realized over the purchase price. However, by holding on to the marks until November 3, the profit evaporated.
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