The assignment is to use asset markets trends to determine whether real GDP growth increased or decreased in 2005:Q1. To start, read about real GDP and how it is determined, specifically what the four expenditure categories are. Based on this, you will need to find market and/or sector performances that provide relevant insights into the GDP growth value we are likely to see in a couple of weeks.
Refer back to the online syllabus, specifically the Using StockCharts.com downloadable notes. On the last page, I have listed abbreviations needed to get graphs for a number of indexes and sectors. If you wish to find others, use the Symbol Lookup in StockCharts.com. If you still can't find something, e-mail me with your question and I will see if I can find a symbol for you to use.
REMEMBER: You are looking at 2005:Q1, so the most important part of the graph to be contrasting with past data is from Jan. 1, 2005 through March 31, 2005. Don't pay attention to April data for this assignment.
IRONIC FACT: The first release of real GDP for 2005:Q1 will be a preliminary one, based on a lot of guessing about what March values were for both inventories and the balance of trade (net exports). So, your conclusions might appear to be contradicted by the first relase of the GDP data. But, the second and third releases (in each of the two following months) will have more accurate inventory and net export data, so that is what you can evaluate your accuracy in terms of. SO, DOES THIS PROVIDE US WITH REALLY ADVANCED DATA VALUES OR WHAT?
THOUGHT: Knowing the above, how might you as an investor use the asset market trend information, well ahead of what actual GDP reports indicate? Hopefully you can now begin to appreciate why "following the crowd" is so often self-destructive behavior when it comes to asset markets!
No comments:
Post a Comment