Macro research takes a tremendous amount of data into consideration to help inform your investment decisions. Everything from census data, to historical, demographic, and social trends, to economic activity, and much more are considered to determine what are the best possible investment decisions at any given time.
Here is what you need to know about why macro research matters and how you can utilize it in your investment decisions.
What is Macro Research?
Macro research depends on the same sort of data that is utilized for macroeconomics to study how the entire economy is doing. Understanding large-scale systems and phenomena that occur across the economy, like inflation and the rate of economic growth, enables investors to make investment decisions that reflect the most relevant and important data.
Macroeconomics examines a number of factors to understand economic phenomena and answer questions about unemployment, inflation, and economic growth. Macro research uses the same information to inform investment decisions.
How does Macro Research Differ from Micro Research?
Macroeconomics studies the entire economy, whereas microeconomics looks at individuals within the economy. Investment opportunities offered by macroeconomics are more likely to inform investing in an entire industry or warnings about a downturn in the entire stock market.
Microeconomics, on the other hand, would be more likely to inform investment decisions into particular companies, rather than how well the industry at large is doing or is likely to do in the future.
What to Look For in Macro Research Forms
You may choose a macro research firm to make investments for you, or you may choose to get research access from such a firm to help you make your own investment decisions. Either way, there are a few factors that you should keep your eye out for when choosing the best macro research firms.
The macro research firm that you choose should have extensive experience doing macro research and making great investment decisions based on that research. Don’t just look for a company that’s been in existence for some time; look for a company that offers a superb track record of quality recommendations that result in good investment decisions.
A good macro research firm takes into account economic data from across the world. It can be tempting for many firms to focus only on the American Stock Market, but predicting turns in the stock market depends on understanding economic trends worldwide. The firm that you choose should have a solid understanding of economic policies and changes in China, Europe, and in emerging markets.
Macro research is all about understanding the data correctly and making sound predictions based on it. Don’t take a chance on any firm that seems to be using guesswork or gumption to make decisions about what you should be investing in. Every investment recommendation should be soundly backed by data supporting the decision.
Free to Start
A quality macro research firm won’t be free. You can expect to pay a fair amount for this kind of valuable data that is often only available to banks and hedge funds.
However, that said, the company that you choose should be confident enough that they have valuable data to give you that they will give you at least a month or so for free. This will give you an opportunity to see whether the information offered by the firm is as valuable as they say it is and try out a few investments yourself to see what works well.
Predictions Ahead of the Rest
It isn’t much of an accomplishment if you are getting predictions about investment opportunities at the same time as your competitors. Research will only give you an edge if it offers data that informs investment decisions before other people have it.
Look for a macro research firm that offers high-quality predictions before other people have access to them. The best firms will give you the same sort of quality data that is available to banks and hedge funds.
What Kind of Predictions Will Macro Research Make?
Macro research can make large-scale predictions about market upturns or downturns and may even predict a recession. However, it can also make more specific predictions for the given time to help you decide what to invest in right now. Here are a few examples of the kind of projections that macro research can make:
- Seasonal industries that are a good investment this year and which are likely to perform well for the next six months
- Client age groups and how they’re spending, such as stocks that are benefiting from Millennial spending.
- Stocks that are being positively affected by inflation over time, offering a very safe opportunity for investment.
Get Started Investing in Macro Research
An experienced and committed macro research firm can set you on the path to making excellent investments with very high returns while taking fewer risks than you thought possible.