Many people think that investing in stocks is a surefire way to get rich and hit the jackpot. The reality couldn’t be further from the truth. See, the truth is that to get average returns that beat inflation, all you need to do is put it in an index fund. Index funds will match the market returns of whichever market the index fund follows, be it the S&P 500, the Dow Jones, or the Nasdaq. The market, on average, has been known to return an average of 10% per year.
Economic indicators are useful in telling us whether the economy is doing well or not. They indicate whether an economy is heading in or out of a recession, or if the economy is experiencing a boom. There are a lot of economic indicators and sometimes they may contradict one another. Thus, it is important to look at the overall economic environment using multiple indicators to get a clearer picture of how the economy is doing. The following is a list of 27 economic indicators you can use to make investment/business decisions.
Start talking about money and interest rates come into the equation. Get a mortgage, buy a house, or get an auto loan—you will hear about interest rates. But what you may not know is that the interest rate referenced most of the time is the nominal interest rate, and not the real interest rate. So what is the difference between real versus nominal interest rates?
We hear the word recession all the time? But what is it and why do recessions happen? The impact of an economic recession is utterly wide-ranging. Depending on its nature and extent, a recession’s effects can be huge or minimal, direct or indirect. In any case, a recession is something that everyone should care to know about.
But in order to care about it, you must know what a recession is and why it happens. According to the National Bureau of Economic Research (NBER) in the US, a recession refers to a considerable decline in economic activities happening at a wide scale, which lingers for several months and is visible in macroeconomic data such as national output, employment, and industrial production, among others. Although the word recession gets thrown around a lot for periods of economic uncertainty or inactivity, it is often used by economists and business leaders to mean (at least) two consecutive quarters of GDP decline. But enough with the technicalities, here are some of the reasons why recessions happen in the economy:
You may not realize but even with increasing wages, you may still feel like you are unable to get by with your day-to-day expenses. This means that your real income may be on a downhill rather than uphill. Your purchasing power is diminished even when you are holding a greater amount of currency because of higher prices. Knowing the difference between real and nominal income is critical in investments. This article is aimed to draw the differences between real and nominal income.