Yesterday we wrote an article on the economic cycles, so what is the difference between that and an economic trend? A trend is the direction that the market is moving over time. The cycle, as we learned yesterday, is the different periods that the economy goes through. Economic trends show you what part of the economic cycle we are moving towards. Trends can go up, down or sideways. Upward is how it sounds, and wages are rising. Downward means that the economy is shrinking and unemployment is rising. Sideways just means it’s a steady economy. There are some indicators to look at in the market to see what trend may be occurring, such as gross domestic product, unemployment and consumer confidence. Others include:
· Stock market trends
· Interest rates
· News
It’s important to track trends in the market if you’re in business. It can help you make better decisions, plan and identify opportunities. That being said, it’s important not to focus too heavily and get tunnel vision on the market. This can lead to missed opportunities and making the wrong assumptions. A happy medium needs to be achieved to be successful at tracking economic trends.
