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Success in the business world is most often achieved by those with a competitive edge.
That's why, here at Money Morning, helping readers find that edge for their investment toolkit is Job One. In the past week alone, we've introduced readers to two little-followed indicators that have big proven payoffs. The first was the Baltic Dry Index, a shipping index that provides a panoramic view of the global economy. And the second was the "Gold Spike Indicator," which helps gold investors time their purchases.
Shrewdly used, either (or both) of these indicators have the potential to provide investors with that sought-after competitive edge.
Take the Baltic Dry Index. As Money Morning Guest Columnist Jack Barnes explained, "the Baltic Dry Index has [historically] shown itself to be the EKG of future industrial demand. And, right now, the BDI is screaming "Danger, Will Robinson!" to any investor who will read it and heed it as a true leading indicator."
Then there's the "Gold Spike Indicator," which Money Morning commodities expert Peter Krauth shared with readers yesterday (Tuesday). Although this market-timing mechanism is elegantly simple, it's also shown itself to be a quite-powerful tool.
"[B]ank holding companies are required by law to make quarterly disclosures on their holdings - including commodities," Krauth said. "And my research shows that there's a certain 'window' during this disclosure period during which some of those commodities can make some pretty hefty price moves. Gold is one of the commodities that's worth watching."
These indicators are just two of hundreds out there that investors use to gain a competitive edge.
For those tracking economic growth, the latest on housing starts, the unemployment rate, and the consumer price index also are necessary to forecast the big picture. But reading numbers and reports is not enough. And one set of information can paint a different picture than another, like the current disparity between economic outlook factors and company financials.
"We're having a major tug of war between the earnings and the economic data, and the economy seems to be far more sluggish than the earnings," Art Cashin, director of floor operations at UBS (NYSE: UBS), told CNBC.
Investors need to go behind the raw data to find the real story - a story Money Morning works to interpret: Where are these numbers headed? How will the markets react? What do investors do now?
That brings us to the latest Money Morning Question of the Week: How have you stocked your investment toolkit? How can investors on Main Street hope to trump the big players on Wall Street? What do you believe investors should rely on to get that competitive edge? Do you find some of the-most-talked-about "indicators" to be on-the-money? Or are they more smoke than promise? Have you found a reliable measure of performance through experience or advice, or are you still searching for your market compass?
Send your thoughts, questions and concerns to firstname.lastname@example.org.
[Editor's Note: Is there a topic you want to see covered as a Question of the Week feature? Then let us know by e-mailing Money Morning at email@example.com. Make sure to reference "question of the week suggestion" in the subject line.
We reserve the right to edit responses for length, grammar and clarity.
Thanks to everyone who took the time to participate - via e-mail or by posting their comments directly on the Money Morning Web site.]
News and Related Story Links:
- Money Morning:
The Baltic Dry Index is Shouting "Danger, Will Robinson!" But Are Investors Listening?
- Money Morning:
When This Indicator Says to 'Buy Gold,' It's Never Wrong
- Money Morning:
Unemployment Report Shows Sluggish Recovery Will Take Years to Replace Jobs Lost in Great Recession
Bad January, Bad First Half: A Gloomy Omen For Stocks
- Money Morning News Archive:
Question of the Week Feature