Macro research uses extremely comprehensive sets of data to inform decisions on a high level. There are a number of data sets that are considered in macro research. For investors, macro research can unveil what businesses are worth investing in and which would be better avoided, as well as when to invest.
What is Considered in Macro Research?
Macro research takes into account the information available to macroeconomics to help inform investment decisions. Unlike other types of investment research, which may look carefully at particular areas, macroeconomics studies the entire economy on a large scale.
Whereas macroeconomics is generally trying to answer questions about the overall health of the economy like determining what causes unemployment or inflation, macro research for investors answers questions about where to invest.
Every company that conducts macro research may consider slightly different data sets, but high-quality macro research should cover the primary 11 sectors with a couple of essential sources of data:
- Inflation. Inflation rates help to determine how valuable your money will be in the future, which can help to determine where and when to invest.
- Economic growth. Trends and growth may point to the next great investment opportunity, while slumps may indicate that an industry isn’t wise to invest in, even if a particular company is doing well.
- Unemployment. Unemployment can be a canary for the economy at large and may help to predict a downturn in the stock market.
- Census data. Knowing who lives where is an excellent way to determine whether a company is positioned to make a sizeable income in a given area.
- Economic activity. Carefully considering the changing trends of economic activity enables investors to see when a particular niche is about to take off.
- Historical, social, and demographic trends. Carefully consider how an area or market is changing to predict how it will respond to a particular business in the future.
How Does Macro Research Help You to Invest?
Your goal in macro research is finding opportunities for investment before others do. When done correctly, macro research reveals very safe but also highly lucrative investment opportunities in businesses or industries that are just starting to truly bloom.
By considering both short-term information and long persisting trends in various economies and markets, macro research provides a holistic perspective on the market. This information makes it easier for you as an investor to make wise choices.
What to Look for in a Macro Research Firm?
You can find macro research services that help you to do your own research and make your own decisions about investment, or you can choose a quality and trusted macro investment firm to do the research and make the investments for you. Whatever you choose, there are a few things that are important to look for in a macro research firm:
- Experience. Experience is important in any kind of financial advisor, but in macro research, which depends so heavily upon long-term trends, experience in the industry is even more important. Look for a firm that has been doing this for some time so they will have a long-standing understanding of the market in a macro sense.
- Worldwide reach. It’s normal for any investor to focus mostly on the US Stock Market, but in this global economy, data collected from other markets like China and Europe as well as emerging markets are also essential to help you make wise decisions about your investments.
- History of good forecasts. Experience in the industry isn’t enough. Look for investors who have made solid forecasts before based on their macro research. Good forecasts show that an investment company is capable of choosing reliable indicators.
- Work well with individuals. If you’re an individual investor, look for an investment firm that is accustomed to helping individuals make good investments. They should offer you the same sort of information that is available to hedge funds and banks. Investment opportunities should be customized for you as an individual and for the level of risk that you are comfortable with.
- Free to start. You’ll have to pay for great investment advice, but the company that you choose should be confident enough that they have the kind of information that you are willing to pay for that they give you at least a month or so of free research before you need to make a monetary investment into their data.
Try Using Macro Research to Inform Your Investment Decisions
Macro research can be an excellent way for you as an individual to get an edge in investment opportunities, even over the big hedge funds and banks. Great macro research reveals information that allows for unusually safe investment options with very high potential for earning. Furthermore, it can predict downturns in the market that may protect you from making investments that will cost you in the future.