Turn Down the Noise

The four economic factors you should really watch

Take a moment to read the business section of any major newspaper and it’s easy to get caught up in the noise. After all, we’re inundated with headlines about high oil prices, the value of the dollar, the rise of countries like China, and even the risk of another U.S. recession.

With so many financial headlines vying for our attention, it’s easy to see why an investor may start to second-guess their financial strategy and long-term goals.

Brad McMillan, the Chief Investment Officer for Commonwealth Financial Network, recently met with some of our clients in Kansas City. Brad said it’s his job to pay attention to what’s on the horizon, and to help investors potentially maximize growth or soften setbacks.

Amid all the clutter in financial news, Brad said there are four economic indicators he really watches for a sense of how the market may perform:

 

  1. Jobs. The most important factor. After all, if people have jobs, they can spend money. Currently, the U.S. is adding two million jobs a year – a level that’s close to what we saw in the 1990s. Remember: When jobs grow, the risk of recession slows.

 

  1. Consumer confidence. In short, how comfortable are people spending money? How optimistic are they about their own financial picture? If Americans feel confident buying, the economy will continue to expand.

 

  1. Business confidence. Same goes for companies. If businesses are willing to hire and invest, the economy benefits. The confidence levels of today’s businesses mirror those we saw in the 1990s and early 2000s.

 

      4. Interest rates. Low interest rates make money cheap for banks to borrow – and eventually lend. In our current business climate, the Fed continues to take steps to stimulate the economy.
 

There’s a number or stat to track everything in our economy. Stay focused on these four indicators when considering your investment strategy. Don’t get sidetracked by inflated headlines.

Remember, they’re just noise.

Questioning your financial strategy? Want to make sure your investment decisions are based on data that matters – not just noisy headlines? Let’s talk.  Email us at info@infinitaskc.com

Brad McMillan is the Chief Investment Officer for Commonwealth Financial Network. He’s a regular media commentator for CNBC, Bloomberg and The Wall Street Journal. He’s also the author of the Independent Market Observer. This is the first of three posts recapping Brad’s recent talk with Infinitas and Pegasus clients.

In the coming weeks, we’ll share more highlights of Brad’s recent talk in Kansas City.

Infinitas is part of the Commonwealth Financial Network, an independent broker/dealer.