ClusterGains
POB 339
6301 Highway 58
Harrison, TN 37341
ph: 423-344-3855
jso10130
Economics
Economics plays a large part in whether the stock market goes up or down. If the economy is in bad shape, it won't matter if you have good stock picks. The economy will bring down almost all of the stocks. One economic factor is unemployment. If 250,000 jobs are lost in one month, and 265,000 jobs are lost in the next month, you cannot expect to make money in the stock market. Investing will only be safe if jobs are being created rather than lost.
Another important economic factor is the housing market. Building and buying houses stimulates the economy. If housing starts or existing home sales are decreasing, the stock market will not do well. Another factor is housing overhang. If the banks are holding on to a lot of delinquent mortgages, this means the housing market could be flooded with massive foreclosure sales at any time, and this will decrease new home sales. So, investors must do internet research to see if various economic factors will support a bull market.
Eldon Mast has an excellent blog that I recommend. It is called The Good News Economist, and it puts a positive spin on what is happening in the U.S. He gives facts and figures to show exactly the pulse of our economy.
A note of caution needs to be mentioned about nuclear stocks. It is true that the world is building dozens of nuclear plants, but that does not mean that nuclear stocks will blast upward in their stock prices. For one thing, the new plants that are being built only amount to about one tenth of the nuclear facilities we already have. So, the future demand for nuclear fuel will only be a mere 10% more.
Secondly, we are still getting a lot of nuclear fuel from old warheads that are being dismantled in keeping with our disarmament agreements with Russia. This process will continue for several years into the future. This means we will not need a great amount of new uranium from mining companies.
Finally, as much as I like the oil companies in North Dakota and Alberta, there is a possibility that billions of barrels of new oil will soon be available from the Kurdish section of Iraq. When this happens, we will have a glut of oil for an extended period. The April 2010 issue of Fast Company magazine has an excellent article on this subject.
POB 339
6301 Highway 58
Harrison, TN 37341
ph: 423-344-3855
jso10130
