PPT Top Down Approach to Investing PowerPoint presentation
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Top Down Approach to Investing
Determining which S&P sectors will over and under perform based upon forecasted. Inflation or deflation. Consumer spending. Business investments. PowerPoint PPT presentation
Title: Top Down Approach to Investing
Top Down Approach to Investing
- Analysis of the Economy
SECURITY ANALYSIS
- Economic analysis
- assessing the general state of the economy and
its potential effects on security returns
perform based upon forecasted future economic
performance
given the economic environment, and then the
future performance of the company and its stock
Economic analysis
- Economic analysis is a study of current and
expected future economic conditions
the performance of the economy has a significant
bearing on the performance and profitability of
the companies that issue common stock
SEVEN ENGINES THAT DRIVE THE ECONOMY
- Demographics
- The largest age group in the U.S. today are
those who are 40 to 44 years old, followed by 35
to 39. These groups account for about 17 of the
U.S. population. They are major contributors to
the increase in U.S. labor productivity, a trend
expected to continue for 5 to 10 more years.
about 1.8 from 1991 to 1995, jumped to 2.6
between 1996 and 1999. It is continuing to
climb.
of the amount in 1989. Technology and
welfare-to-work programs have helped in the
decline.
KEEPING TRACK OF THE ECONOMY
- GDP (June 25)
- Industrial Production (June 16)
- Leading Indicators (June 17)
- Personal Income (June 28)
- Retail Sales (June 14)
- Consumer Prices (June 15)
- Producer Prices (June 11)
- Unemployment (July 2)
- Housing Starts (June 16)
ECONOMIC ACTIVITY
- The behavior of the economy is captured in the
business cycle
activity over time
of all goods and services produced in the country
during one year
ECONOMIC ACTIVITY
- Another measure is the index of industrial
production
powerful forces affecting the level of economic
activity
Economic Activity
- Several economic factors influence overall
economic activity and security returns
Board
GOVERNMENTAL FISCAL POLICY
- Government fiscal policy affects the economy
through the use of
MONETARY POLICY
- Monetary policy actions of the Federal Reserve
Board also affect the economy through
OTHER IMPORTANT FACTORS
- Other important factors include
- Inflation or deflation
- Consumer spending
- Business investments
- Foreign trade and foreign exchange rates
