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There are three major areas that you should monitor to stay informed on the economy and market factors. Try to determine the impact of these on your Macro Investment Groups.

1. Market interest rates and FED monetary policy.
a.What is the interest rate's long term trend? Short term trend?
b. What is the impact of the FED pushing the rates in one direction?
c. What else is the FED doing; ie, money supply/changing basis?
d. What are interest rate changes doing to the value of the dollar?

2. Profits/Earnings data or other issues impacting the financials.
a. Stocks usually increase in price based on actual current earnings and/or on the prospects of higher future earnings.
b. What is the market's price/earning ratio? Where is the current P/E in comparison to its historical P/E Range?
c. What is the quality and sustainability of these profits? How are these companies making their profits? By growing sales or by cutting cost and head count? Could be they are even "cooking the books"!
d. What will the prices of oil do to their cost profile? Oil impacts nearly every part of our economy.
e. How will the value of the dollar impact the ability to export products?

3. International Events that could impact the Global Economy and Investor Markets.
a. Other major unforeseen situations that occassionally occur. Such as September 11, an unforcasted event.
b. Will an ongoing conflict or potential war impact the markets? An increase in oil prices due to a decrease in oil production, in a volatile country, can slow economic growth globally.
c. Like the financial crisis in Asia or South America in 1998.

Focus your time wisely developing your thinking on a written updateable outline on these factors. Focus your reading and listening on these three areas. Also, find a few gray haired advisors that you listen to, at every opportunity they appear. The ones that have earned our respect because they consistently get it right over a long period of time.

This Economic and Market Worksheet will help you manage the facts. Click here to learn more about our view of the Current Market Factors.