- Investment strategies
- Why invest in the stock market?
- Buy and hold or technical analysis? Why you need an investment plan
- Value investing and short selling in volatile markets
- Using technical analysis to support value investing
- Investing in the unexpected
- Franking credits, explained
- What is dividend stripping and is it a sensible strategy?
- Investing in quality IPOs
- How to invest in stocks that benefit from a moving Australian dollar
- Reasons to avoid bonds when interest rates are low
- How value investors use Skaffold
- Quality, growth and value = a winning strategy
- Know your investor type and boost your performance
- Technical + fundamental analysis = better buy and sell decisions
- Fundamental investing
- Value investing and the price earnings ratio
- Intrinsic valuation models and methodology
- Value investments or value traps?
- How to find value stocks in a bull market
- Find value investments in expanding markets
- Why capital raisings struggle to add investment value
- How to value an insurance company
- Top stocks
- 5 qualities of top stocks
- How to find stocks with a competitive advantage
- Why return on equity is the best measure of business performance
- Using cash flow to find value investments
- Finding high quality dividend stocks
- Debt is not always a dirty word
- Why Skaffold share investment software makes sense
- Using economic factors to uncover the best investment options
- How do experts find top stocks to invest in?
- Investing in global stocks
- How to invest in international shares on global stock markets
- Benefits of investing in international shares
Using economic factors to uncover the best investment options
Understand the implications of economic factors so you can focus on the best investment options.
Every company listed on the stock market, and ultimately your portfolio’s performance, is impacted by a wide variety of economic factors. As an informed investor it’s your job to understand the implications for future business performance on the stocks you own or investment opportunities you may wish to buy.
Domestic economic indicators can provide you with useful insights into what sectors and stocks stand to benefit (or lose) from economic activity beyond their control. Remember, ‘domestic factors’ dominate analysts’ consensus earnings forecasts.
By adding other high level economic factors to your stock research process, you’ll get a good idea of where the broader economy is heading and what it has in store for share markets.
Investment decisions are affected by sector changes
It’s equally important to understand how changes within a sector can significantly impact individual companies.
Before rolling your sleeves up to take a closer look at your portfolio and check if you still hold top stocks, first consider the most profitable investment themes of the previous 12 months and decide if they’re likely to continue. Also think about the future directions of the local and international economy, and where the greatest opportunities for growth lie.
Paying attention to what’s happening around you, and keeping your ear to the ground, will help you spot trending investment themes, narrow down your list of investment opportunities to just the very best stocks and ensure you can manage your portfolio with confidence.
Once you understand the impact of economic factors, and the negative correlation between asset classes, you’ll also recognise the need to regularly review the asset allocations within your overall portfolio as market conditions change.