For many traders and investors accurately predicting how shifts in the financial cycle will impact markets remains a frustrating exercise. Financial cycles tend to occur over many years and interact in such a way that they create booms and busts in credit, housing and equity markets.
As we enter the last quarter of 2013, US politicians are once again playing a game of brinkmanship; unfortunately one that could have dire consequences for the world’s economy. Politicians continue to entrench opposing positions rather than engage in positive action. It is highly unlikely that the entire US government will shut down as essential services will remain active, but nevertheless, investors dislike uncertainty and markets have been under pressure as the Third Quarter closed.
Macroeconomic Trends - Impact on Investment Decision ProcessVeronica Lopez-Lopez
There are various reasons why it is essential to consider macroeconomic projections and trends when making investment decisions. Before making the appropriate investment decisions, investors must find an accurate macroeconomic forecast. Therefore, investors should be aware of the basic realities offered in macroeconomic theory.
Although not all economists agree, the majority believe that distinct methodologies are required to research specific markets and the entire economy. Therefore, the current contrast between microeconomics and macroeconomics is critical when making investment decisions. Although most economists agree on the basic assumptions of microeconomic analysis, macroeconomics arose from a discontent with microeconomics' expected outcomes. As a result, the conclusions drawn from macroeconomic studies are not widely accepted but also necessary to consider.
Macroeconomics uses aggregated statistics and other factors to try to measure economy-wide phenomena. As a result, complicated variables are frequently held constant in microeconomics to isolate how actors respond to specific changes. This is a shift in macroeconomics, where historical data is acquired first, and then themes of unexpected results are investigated. To be done correctly, this necessitates a massive amount of knowledge, and in some cases, macroeconomists lack the necessary measurement tools. Therefore, an investor should be careful when making an investment decision for this reason.
Macroeconomists often disagree on how to gauge the effectiveness and make predictions. As a result, it's easy for investors to draw inaccurate conclusions or even use signs contradicting each other. In addition, investors should study basic economics, although the field's shortcomings provide plenty of opportunities for investors to be misled.
La pandemia di coronavirus (COVID-19) pone sfide di stabilità sanitaria, economica e finanziaria senza precedenti. A seguito dell'epidemia di COVID-19, i prezzi delle attività a rischio sono crollati e la volatilità del mercato è aumentata vertiginosamente, mentre le aspettative di inadempienze diffuse hanno portato a un aumento dei costi di indebitamento. Le decisive azioni di politica monetaria, finanziaria e fiscale volte a contenere le ricadute della pandemia e sono riuscite a stabilizzare gli investitori tra la fine di marzo e l'inizio di aprile. I mercati hanno recuperato alcune delle loro perdite.
I need a 125 word reply to each of the four following forum postings.docxtroutmanboris
I need a 125 word reply to each of the four following forum postings in a finance class (500 words total) You are responding to comments made by other students in the class. MUST BE ORIGINAL!
Forum #1
When an organization decides to engage in international financing activities, they also take on additional risk as well as opportunities. The main risks that are associated with businesses engaging in international finance include foreign exchange risk and political risk. These risks may sometimes make it difficult to maintain constant and reliable revenue. When an organization decides to engage in international financing activities, they also take on additional risk as well as opportunities. The main risks that are associated with businesses engaging in international finance include foreign exchange risk and political risk. These risks may sometimes make it difficult to maintain constant and reliable revenue. Foreign exchange risk occurs when the value of investment fluctuates due to changes in a currency's exchange rate. When a domestic currency appreciates against a foreign currency, profit or returns earned in the foreign country will decrease after being exchanged back to the domestic currency. Political risk transpires when a country's government unexpectedly changes its policies, which now negatively affect the foreign company. These policy changes can include such things as trade barriers, which serve to limit or prevent international trade. “Since 2010, one in ten of the countries surveyed have experienced a significant increase in the level of short-term political risk. These risks include governments asserting control over natural resources, regimes being ousted by popular uprisings and the expropriation of foreign investors' assets” (Brown, Sophle. 2013).
References
Brown, Sophle. Political instability on the rise. Dec 11, 2013. Retrieved from web:
http://www.cnn.com/2013/12/11/business/maplecroft-political-risk/
Forum #2
Multinational companies seem to be the standard for future business. They are typically more productive and pay their workers more than comparable locally owned businesses (Eun & Renick, 2015). With the many advantages that are available to multinationals it is no surprise that companies are shifting in this direction. However, all of the advantages do not come risk free as you may have expected. Two of the significant risks associated with multinationals and international financial management are foreign exchange risk and political risks.
Foreign exchange risk is what would likely be the first thing you would consider when thinking about international finance. Exchange rates fluctuate on a regular basis and can be somewhat unpredictable at times. This has been the case since the early 1970s when fixed exchange rates were abandoned (Eun & Renick, 2015). Exchange risk is the difference between the exchange rate at the moment a business deal is closed for a given amount and the exchange rate at the moment when .
Rising interest rates have promoted Central Banks around the country to increase the interest rates. This article examines impact of interest rate reversal on VC/PE Investments in the Fintech companies. Key areas of impact would include profitability, valuation, customer demand and availability of alternative investments. The optimism/over zealousness displayed by the investor community is expected to temper down. They can be expected to take a very cautious approach. This may not impact fintech players with proven track record; but the ones with unproven capabilities/business models can be ones who would get most impacted.
As we enter the last quarter of 2013, US politicians are once again playing a game of brinkmanship; unfortunately one that could have dire consequences for the world’s economy. Politicians continue to entrench opposing positions rather than engage in positive action. It is highly unlikely that the entire US government will shut down as essential services will remain active, but nevertheless, investors dislike uncertainty and markets have been under pressure as the Third Quarter closed.
Macroeconomic Trends - Impact on Investment Decision ProcessVeronica Lopez-Lopez
There are various reasons why it is essential to consider macroeconomic projections and trends when making investment decisions. Before making the appropriate investment decisions, investors must find an accurate macroeconomic forecast. Therefore, investors should be aware of the basic realities offered in macroeconomic theory.
Although not all economists agree, the majority believe that distinct methodologies are required to research specific markets and the entire economy. Therefore, the current contrast between microeconomics and macroeconomics is critical when making investment decisions. Although most economists agree on the basic assumptions of microeconomic analysis, macroeconomics arose from a discontent with microeconomics' expected outcomes. As a result, the conclusions drawn from macroeconomic studies are not widely accepted but also necessary to consider.
Macroeconomics uses aggregated statistics and other factors to try to measure economy-wide phenomena. As a result, complicated variables are frequently held constant in microeconomics to isolate how actors respond to specific changes. This is a shift in macroeconomics, where historical data is acquired first, and then themes of unexpected results are investigated. To be done correctly, this necessitates a massive amount of knowledge, and in some cases, macroeconomists lack the necessary measurement tools. Therefore, an investor should be careful when making an investment decision for this reason.
Macroeconomists often disagree on how to gauge the effectiveness and make predictions. As a result, it's easy for investors to draw inaccurate conclusions or even use signs contradicting each other. In addition, investors should study basic economics, although the field's shortcomings provide plenty of opportunities for investors to be misled.
La pandemia di coronavirus (COVID-19) pone sfide di stabilità sanitaria, economica e finanziaria senza precedenti. A seguito dell'epidemia di COVID-19, i prezzi delle attività a rischio sono crollati e la volatilità del mercato è aumentata vertiginosamente, mentre le aspettative di inadempienze diffuse hanno portato a un aumento dei costi di indebitamento. Le decisive azioni di politica monetaria, finanziaria e fiscale volte a contenere le ricadute della pandemia e sono riuscite a stabilizzare gli investitori tra la fine di marzo e l'inizio di aprile. I mercati hanno recuperato alcune delle loro perdite.
I need a 125 word reply to each of the four following forum postings.docxtroutmanboris
I need a 125 word reply to each of the four following forum postings in a finance class (500 words total) You are responding to comments made by other students in the class. MUST BE ORIGINAL!
Forum #1
When an organization decides to engage in international financing activities, they also take on additional risk as well as opportunities. The main risks that are associated with businesses engaging in international finance include foreign exchange risk and political risk. These risks may sometimes make it difficult to maintain constant and reliable revenue. When an organization decides to engage in international financing activities, they also take on additional risk as well as opportunities. The main risks that are associated with businesses engaging in international finance include foreign exchange risk and political risk. These risks may sometimes make it difficult to maintain constant and reliable revenue. Foreign exchange risk occurs when the value of investment fluctuates due to changes in a currency's exchange rate. When a domestic currency appreciates against a foreign currency, profit or returns earned in the foreign country will decrease after being exchanged back to the domestic currency. Political risk transpires when a country's government unexpectedly changes its policies, which now negatively affect the foreign company. These policy changes can include such things as trade barriers, which serve to limit or prevent international trade. “Since 2010, one in ten of the countries surveyed have experienced a significant increase in the level of short-term political risk. These risks include governments asserting control over natural resources, regimes being ousted by popular uprisings and the expropriation of foreign investors' assets” (Brown, Sophle. 2013).
References
Brown, Sophle. Political instability on the rise. Dec 11, 2013. Retrieved from web:
http://www.cnn.com/2013/12/11/business/maplecroft-political-risk/
Forum #2
Multinational companies seem to be the standard for future business. They are typically more productive and pay their workers more than comparable locally owned businesses (Eun & Renick, 2015). With the many advantages that are available to multinationals it is no surprise that companies are shifting in this direction. However, all of the advantages do not come risk free as you may have expected. Two of the significant risks associated with multinationals and international financial management are foreign exchange risk and political risks.
Foreign exchange risk is what would likely be the first thing you would consider when thinking about international finance. Exchange rates fluctuate on a regular basis and can be somewhat unpredictable at times. This has been the case since the early 1970s when fixed exchange rates were abandoned (Eun & Renick, 2015). Exchange risk is the difference between the exchange rate at the moment a business deal is closed for a given amount and the exchange rate at the moment when .
Rising interest rates have promoted Central Banks around the country to increase the interest rates. This article examines impact of interest rate reversal on VC/PE Investments in the Fintech companies. Key areas of impact would include profitability, valuation, customer demand and availability of alternative investments. The optimism/over zealousness displayed by the investor community is expected to temper down. They can be expected to take a very cautious approach. This may not impact fintech players with proven track record; but the ones with unproven capabilities/business models can be ones who would get most impacted.
Although the US economy has come back a bit from the early days of the Covid-19 recession, it has a way to go. It is time to consider your investments and the US economy.
https://youtu.be/nIiUQtAhzKI
A Safer Financial Sector to Serve South Africa BetterDr Lendy Spires
Although South Africa‘s financial institutions were resilient in the face of the crisis, the indirect impact through job losses was devastating. In short, we cannot be complacent. National Treasury launched a formal review of the financial regulatory system in 2007. The scope of this review was expanded in 2008 after the financial crisis. This work has now been completed, culminating in this document, which sets out a number of proposals. This document provides a comprehensive review of the key challenges facing the financial sector, and proposes a roadmap to deal with the challenges. It presents government‘s vision of how to reshape the sector in order to address these challenges, and sets out the policy priorities of government over the next few years. The approach to financial sector reform takes into account not only the direct lessons of the crisis, but also the broader policy objectives of maintaining financial sector stability, protecting consumers and ensuring that efficient, effective and inexpensive financial services are more accessible. Box 1.1 A safer financial sector to serve South Africa better To promote sustained economic growth and development, South Africa needs a stable financial services sector that is accessible to all. This policy document sets out government‟s proposals, emphasising financial stability, consumer protection and financial inclusion. The main proposal is to separate prudential and market conduct regulation. In addition, it addresses: Stability.
An enormous effort has gone into banking and financial regulatory reform following the recent financial crisis. This presentation is an attempt to:
Describe some key open questions about the relation among stability, growth, and regulatory reform.
Raise some concerns about overemphasis on some instruments and under emphasize on others in the ongoing reform process.
With various vaccinations becoming widely available, it was just a matter of when, and not if, global markets will get back on their feet. But fast forward to the middle of the year, and a lot of economies are still in doubt as to whether a full relaxation of measures will take place by the end of the year.
Orbex quarterly reports are a holy grail for traders everywhere, providing invaluable fundamental and technical insights delivered by a seasoned research team.
1. GLOBAL IMBALANCES1.1 Cheap But Flighty How Global Imbalanc.docxSONU61709
1. GLOBAL IMBALANCES
1.1 Cheap But Flighty: How Global Imbalances Create Financial Fragility
by Toni Ahnert and Enrico Perotti
Bank of Canada Working Paper 2015-33
https://www.bankofcanada.ca/wp-content/uploads/2015/08/wp2015-33.pdf
August 2015
How a wealth shift to emerging countries may lead to instability in developed countries. Investors exposed to expropriation risk are willing to pay a safety premium to invest in countries with good property rights. Domestic intermediaries compete for such cheap funding by carving out safe claims, which requires demandable debt. While foreign inflows allow countries to expand their domestic credit, risk-intolerant foreign investors withdraw even under minimal uncertainty. We show that more foreign funding causes larger and more frequent runs. Beyond some scale, even risk-tolerant domestic investors are induced to withdraw to avoid dilution. As excess liquidation causes social losses, a domestic planner may seek prudential measures on the scale of foreign inflows.
Topics to study:
· Investment / risk - relationship
· Global Imbalances
· Factors to attract foreign investment
· Safety-seeking foreign funding
1. An increasing scale of foreign funding may induce runs even by risk-tolerant investors since they seek to avoid dilution.
2. Result supports a mandate for introducing a macroprudential regulator to oversee the nature of foreign inflows because the socially preferred funding structure would involve less credit volume and more stability than the private choice.
3. Global imbalances shaped the credit boom and, ultimately, the financial crisis
4. The accumulation of wealth in countries with a weak protection of property rights creates a demand for absolute safety provided by intermediaries in developed countries.
5. The safety-seeking nature of foreign flows creates risk.
1.2 Global Imbalances and the Financial Crisis: Products of Common Causes
Maurice Obstfeld and Kenneth Rogoff
University of California, Berkeley, and Harvard University.
Federal Reserve Bank of San Francisco
https://scholar.harvard.edu/files/rogoff/files/global_imbalances_and_financial_crisis_0.pdf
November 2009
This paper makes a case that the global imbalances of the 2000s and the recent global financial crisis are intimately connected. Both have their origins in economic policies followed in a number of countries in the 2000s and in distortions that influenced the transmission of these policies through U.S. and ultimately through global financial markets. In the U.S., the interaction among the Fed’s monetary stance, global real interest rates, credit market distortions, and financial innovation created the toxic mix of conditions making the U.S. the epicenter of the global financial crisis. Outside the U.S., exchange rate and other economic policies followed by emerging markets such as China contributed to the United States’ ability to borrow cheaply abroad and thereby finance its unsustainable housing bubble.
Topics to st ...
The digital marketing industry is changing faster than ever and those who don’t adapt with the times are losing market share. Where should marketers be focusing their efforts? What strategies are the experts seeing get the best results? Get up-to-speed with the latest industry insights, trends and predictions for the future in this panel discussion with some leading digital marketing experts.
When most people in the industry talk about online or digital reputation management, what they're really saying is Google search and PPC. And it's usually reactive, left dealing with the aftermath of negative information published somewhere online. That's outdated. It leaves executives, organizations and other high-profile individuals at a high risk of a digital reputation attack that spans channels and tactics. But the tools needed to safeguard against an attack are more cybersecurity-oriented than most marketing and communications professionals can manage. Business leaders Leaders grasp the importance; 83% of executives place reputation in their top five areas of risk, yet only 23% are confident in their ability to address it. To succeed in 2024 and beyond, you need to turn online reputation on its axis and think like an attacker.
Key Takeaways:
- New framework for examining and safeguarding an online reputation
- Tools and techniques to keep you a step ahead
- Practical examples that demonstrate when to act, how to act and how to recover
Digital marketing is the art and science of promoting products or services using digital channels to reach and engage with potential customers. It encompasses a wide range of online tactics and strategies aimed at increasing brand visibility, driving website traffic, generating leads, and ultimately, converting those leads into customers.
https://nidmindia.com/
How to Run Landing Page Tests On and Off Paid Social PlatformsVWO
Join us for an exclusive webinar featuring Mariate, Alexandra and Nima where we will unveil a comprehensive blueprint for crafting a successful paid media strategy focused on landing page testing.With escalating costs in paid advertising, understanding how to maximize each visitor’s experience is crucial for retention and conversion.
This session will dive into the methodologies for executing and analyzing landing page tests within paid social channels, offering a blend of theoretical knowledge and practical insights.
The Pearmill team will guide you through the nuances of setting up and managing landing page experiments on paid social platforms. You will learn about the critical rules to follow, the structure of effective tests, optimal conversion duration and budget allocation.
The session will also cover data analysis techniques and criteria for graduating landing pages.
In the second part of the webinar, Pearmill will explore the use of A/B testing platforms. Discover common pitfalls to avoid in A/B testing and gain insights into analyzing A/B tests results effectively.
SMM Cheap - No. 1 SMM panel in the worldsmmpanel567
Boost your social media marketing with our SMM Panel services offering SMM Cheap services! Get cost-effective services for your business and increase followers, likes, and engagement across all social media platforms. Get affordable services perfect for businesses and influencers looking to increase their social proof. See how cheap SMM strategies can help improve your social media presence and be a pro at the social media game.
When most people in the industry talk about online or digital reputation management, what they're really saying is Google search and PPC. And it's usually reactive, left dealing with the aftermath of negative information published somewhere online. That's outdated. It leaves executives, organizations and other high-profile individuals at a high risk of a digital reputation attack that spans channels and tactics. But the tools needed to safeguard against an attack are more cybersecurity-oriented than most marketing and communications professionals can manage. Business leaders Leaders grasp the importance; 83% of executives place reputation in their top five areas of risk, yet only 23% are confident in their ability to address it. To succeed in 2024 and beyond, you need to turn online reputation on its axis and think like an attacker.\
Key Takeaways:
- New framework for examining and safeguarding an online reputation
- Tools and techniques to keep you a step ahead
- Practical examples that demonstrate when to act, how to act and how to recover
Is AI-Generated Content the Future of Content Creation?Cut-the-SaaS
Discover the transformative power of AI in content creation with our presentation, "Is AI-Generated Content the Future of Content Creation?" by Puran Parsani, CEO & Editor of Cut-The-SaaS. Learn how AI-generated content is revolutionizing marketing, publishing, education, healthcare, and finance by offering unprecedented efficiency, creativity, and scalability.
Understanding
AI-Generated Content:
AI-generated content includes text, images, videos, and audio produced by AI without direct human involvement. This technology leverages large datasets to create contextually relevant and coherent material, streamlining content production.
Key Benefits:
Content Creation: Rapidly generate high-quality content for blogs, articles, and social media.
Brainstorming: AI simulates conversations to inspire creative ideas.
Research Assistance: Efficiently summarize and research information.
Market Insights:
The content marketing industry is projected to grow to $17.6 billion by 2032, with AI-generated content expected to dominate over 55% of the market.
Case Study: CNET’s AI Content Controversy:
CNET’s use of AI for news articles led to public scrutiny due to factual inaccuracies, highlighting the need for transparency and human oversight.
Benefits Across Industries:
Marketing: Personalize content at scale and optimize engagement with predictive analytics.
Publishing: Automate content creation for faster publication cycles.
Education: Efficiently generate educational materials.
Healthcare: Create accurate content for patients and professionals.
Finance: Produce timely financial content for decision-making.
Challenges and Ethical Considerations:
Transparency: Disclose AI use to maintain trust.
Bias: Address potential AI biases with diverse datasets.
SEO: Ensure AI content meets SEO standards.
Quality: Maintain high standards to prevent misinformation.
Conclusion:
AI-generated content offers significant benefits in efficiency, personalization, and scalability. However, ethical considerations and quality assurance are crucial for responsible use. Explore the future of content creation with us and see how AI is transforming various industries.
Connect with Us:
Follow Cut-The-SaaS on LinkedIn, Instagram, YouTube, Twitter, and Medium. Visit cut-the-saas.com for more insights and resources.
Most small businesses struggle to see marketing results. In this session, we will eliminate any confusion about what to do next, solving your marketing problems so your business can thrive. You’ll learn how to create a foundational marketing OS (operating system) based on neuroscience and backed by real-world results. You’ll be taught how to develop deep customer connections, and how to have your CRM dynamically segment and sell at any stage in the customer’s journey. By the end of the session, you’ll remove confusion and chaos and replace it with clarity and confidence for long-term marketing success.
Key Takeaways:
• Uncover the power of a foundational marketing system that dynamically communicates with prospects and customers on autopilot.
• Harness neuroscience and Tribal Alignment to transform your communication strategies, turning potential clients into fans and those fans into loyal customers.
• Discover the art of automated segmentation, pinpointing your most lucrative customers and identifying the optimal moments for successful conversions.
• Streamline your business with a content production plan that eliminates guesswork, wasted time, and money.
Financial curveballs sent many American families reeling in 2023. Household budgets were squeezed by rising interest rates, surging prices on everyday goods, and a stagnating housing market. Consumers were feeling strapped. That sentiment, however, appears to be waning. The question is, to what extent?
To take the pulse of consumers’ feelings about their financial well-being ahead of a highly anticipated election, ThinkNow conducted a nationally representative quantitative survey. The survey highlights consumers’ hopes and anxieties as we move into 2024. Let's unpack the key findings to gain insights about where we stand.
In this presentation, Danny Leibrandt explains the impact of AI on SEO and what Google has been doing about it. Learn how to take your SEO game to the next level and win over Google with his new strategy anyone can use. Get actionable steps to rank your name, your business, and your clients on Google - the right way.
Key Takeaways:
1. Real content is king
2. Find ways to show EEAT
3. Repurpose across all platforms
Everyone knows the power of stories, but when asked to come up with them, we struggle. Either we second guess ourselves as to the story's relevance, or we just come up blank and can't think of any. Unlocking Everyday Narratives: The Power of Storytelling in Marketing will teach you how to recognize stories in the moment and to recall forgotten moments that your audience needs to hear.
Key Takeaways:
Understand Why Personal Stories Connect Better
How To Remember Forgotten Stories
How To Use Customer Experiences As Stories For Your Brand
Mastering Multi-Touchpoint Content Strategy: Navigate Fragmented User JourneysSearch Engine Journal
Digital platforms are constantly multiplying, and with that, user engagement is becoming more intricate and fragmented.
So how do you effectively navigate distributing and tailoring your content across these various touchpoints?
Watch this webinar as we dive into the evolving landscape of content strategy tailored for today's fragmented user journeys. Understanding how to deliver your content to your users is more crucial than ever, and we’ll provide actionable tips for navigating these intricate challenges.
You’ll learn:
- How today’s users engage with content across various channels and devices.
- The latest methodologies for identifying and addressing content gaps to keep your content strategy proactive and relevant.
- What digital shelf space is and how your content strategy needs to pivot.
With Wayne Cichanski, we’ll explore innovative strategies to map out and meet the diverse needs of your audience, ensuring every piece of content resonates and connects, regardless of where or how it is consumed.
Core Web Vitals SEO Workshop - improve your performance [pdf]Peter Mead
Core Web Vitals to improve your website performance for better SEO results with CWV.
CWV Topics include:
- Understanding the latest Core Web Vitals including the significance of LCP, INP and CLS + their impact on SEO
- Optimisation techniques from our experts on how to improve your CWV on platforms like WordPress and WP Engine
- The impact of user experience and SEO
The session includes a brief history of the evolution of search before diving into the roles technology, content, and links play in developing a powerful SEO strategy in a world of Generative AI and social search. Discover how to optimize for TikTok searches, Google's Gemini, and Search Generative Experience while developing a powerful arsenal of tools and templates to help maximize the effectiveness of your SEO initiatives.
Key Takeaways:
Understand how search engines work
Be able to find out where your users search
Know what is required for each discipline of SEO
Feel confident creating an SEO Plan
Confidently measure SEO performance
The Forgotten Secret Weapon of Digital Marketing: Email
Digital marketing is a rapidly changing, ever evolving industry--Influencers, Threads, X, AI, etc. But one of the most effective digital marketing tools is also one of the oldest: Email. Find out from two Houston-based digital experts how to maximize your results from email.
Key Takeaways:
Email has the best ROI of any digital tactic
It can be used at any stage of the customer journey
It is increasingly important as the cookie-less future gets closer and closer
5 big bets to drive growth in 2024 without one additional marketing dollar AND how to adapt to the biggest shifting eCommerce trend- AI.
1) Romance Your Customers - Retention
2) ‘Alternative’ Lead Gen - Advocacy
3) The Beautiful Basics - Conversion Rate Optimization
4) Land that Bottom Line - Profitability
5) Roll the Dice - New Business Models
2. For many traders and
investors accurately predicting
how shifts in the financial
cycle will impact markets
remains a frustrating exercise.
Financial cycles tend to occur
over many years and interact
in such a way that they create
booms and busts in credit,
housing and equity markets.
More info on:
http://www.chaseedwards.com.au/
3. If anything, the recent Global Financial Crisis has
provided a timely reminder for the importance of
the financial cycle while exposing our limited
understanding of such episodes. So what lessons
can be learn from financial cycle such as the Great
Depression of the 1930s, the Black Monday stock
market crash of 1987 and the Dot-Com Bubble in
the early 2000s?
More info on:
http://www.chaseedwards.com.au/
4. One factor that stands out
from these events is the
significant correlation
between economic growth
and the performance of
financial markets. Generally
speaking, when short-term
volatility has been factored
in, markets will mirror the
expected performance of the
economy.
More info on:
http://www.chaseedwards.com.au/
5. There is an important distinction to be made here
however, given that astute investors will make
decisions based upon their reading of the future
economy as opposed to its current position. For
example, investors will direct money into equities
if they feel that the economy is entering a growth
phase.
More info on:
http://www.chaseedwards.com.au/
6. By comparison, the stock market may begin to
decline should investors foresee that inflationary
pressures are building and the economy is at risk
of overheating. In this scenario there is an
expectation that counter measures such as interest
rate increases or reduced government spending
may undermine economic growth.
More info on:
http://www.chaseedwards.com.au/
7. The International Monetary
Fund makes an important
distinction between business
cycles and financial cycles.
The best way of
understanding this distinction
lies in the economic
indicators used to measure
fluctuations in either cycle.
More info on:
http://www.chaseedwards.com.au/
8. For the business cycle, the IMF analyses Gross
Domestic Product as an important aggregate
measure. However, when it comes to the financial
cycle the IMF relies upon house price data, equity
prices and credit volumes from 21 advanced
economies.
More info on:
http://www.chaseedwards.com.au/
9. Most veteran investors believe
that cycles do indeed exist and it
is for this reason that many adopt
investment strategies formulated
around anticipated future
movements in the financial cycle.
Fluctuations in the financial cycle
may be exploited in order to
profit from periods where market
sentiment has factored in future
economic growth.
More info on:
http://www.chaseedwards.com.au/
