sourcesofmarketknowledge.docVIP

Sources of market knowledge: Thompson One Banker Capital IQ Deal Focus SEC10Q / 10K TECHNICAL What is GDP? DefinitionGross Domestic Product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Why Do Investors Care?GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economys undercurrents, which can translate to investment opportunities and guidance in managing a portfolio. What are housing starts? DefinitionHousing starts measure initial construction of residential units (single-family and multi-family) each month. A rising (falling) trend points to gains (declines) in demand for furniture, home furnishings and appliances. Why Do Investors Care?Two words...Ripple Effect. This narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as housing starts, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Home builders usually dont start a house unless they are fairly confident it will sell upon or before its completion. Changes in the rate of housing starts tell