In the words of John D. Rockefeller “The person who starts simply with the idea of getting rich won’t succeed; you must have a larger ambition.” Global trends refer to the development of any kind of significant situation that affects various countries across the world. With drifting global demographics, expeditious technological change and increase in geopolitical competition, the world is at a critical juncture. The covid-19 pandemic has reminded the world of its fragility, creating new uncertainties about economic growth and state stability.
Trends are factors that allow traders and investors to capture and maximize profits. Whether it’s based on a short-run or a long-run, in an overall trending market or a range of environment, the flow from one price to another is what creates profits and losses. These four major constituents of stock market trends include government, international transactions, speculation & expectation and supply & demand.
Macroeconomic conditions affect the financial results of companies because their sales and margins are corresponding with economic growth, interest rates, inflation, and unemployment in the environment in which they intervene. Certain economic sectors are more or less diplomatic to those variables, but part of a firm’s utility depends not only on current performance, but also on the presupposition of how those macroeconomic variables will operate in the future.
This presumption concerning the macroeconomic variables’ performance in the future is a dominant point in asset pricing because, for an investor, the salient thing to consider when estimating an investment is how much will potentially be paid in the future balanced against the risk assumed at the time of application.
Therefore, the most important ingredient in the success of a stock market is a sharp sense of timing.