In our previous videos, we’ve learned the importance of tracking the big market cycles and how fundamental and economic forces drive those movements in this video. We’re going to look at the top three economic indicators to look out for. In the past, only experienced professionals and economists received this data in a timely fashion, but in the Internet age everyone has access to dozens of economic surveys and indicators every week.

This data can be divided into three main groups: interest rate and monetary policy, employment and jobs data, and consumption and production data.

Now, keep in mind most of this data is based on the US economy since it’s the biggest financial powerhouse that moves global markets.

So, first let’s look at interest rate and monetary policy. For the US, the Federal Open Market Committee or FOMC makes scheduled announcements 8 times a year regarding interest rate or monetary policy. This can have a major impact on the markets because it affects the cost of borrowing and the money supply in the market. Other economies such as the eurozone, China, Australia, Japan and Switzerland have their own scheduled announcements where they set their interest rate and monetary policy.

Next, employment and jobs data. This data is very important because job creation is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. The most important figure is the non-farm payroll which accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States. This vital piece of economic data is released monthly usually on the first Friday after the month ends. The combination of importance and earliness makes for hefty market impacts. Other indicators include the employee cost index or ECI employment situation report and weekly jobless claims report.

Finally, there’s consumption and production data. There are various reports that measure different aspects of consumption and production, so it’s up to the savvy investor to piece it all together. Some examples include the Gross Domestic Product or GDP, Purchasing Managers Index or PMI, Philly Fed Report, Consumer Confidence Index, Producer Price Index, Consumer Price Index and the existing home sales report and housing starts. In general, the key is to look out for the kind of news that’s relevant to the current market climate.

For example, when the stock market has been bullish for many years and interest rates are really low, astute investors will keep their eyes peeled for any indication about interest rate increases as these will have a major impact on the market.

So remember, do your research and always make informed investment decisions.

You’ve probably heard about the importance of diversifying your portfolio.

The question is how do you do it and what if you have limited capital to invest and can’t afford to purchase a lot of different stocks at once? In this video, we’ll introduce you to two new asset classes: exchange-traded funds or ETFs and real estate investment trusts or REITs. These will enable you to diversify your portfolio and generate passive income without having to invest too much. First, let’s look at ETFs also known as tracker funds.

ETFs track the performance of a stock index like the STI Dow Jones Hang Seng or commodity and bond indices. These are useful for new investors because by simply investing in ETFs you’re effectively investing in the price movements of all the companies listed on the underlying index. This makes it much easier to diversify your portfolio, then if you picked individual stocks and commodities especially if you’re starting out with limited capital.

Besides stocks and ETFs, however, there is another popular asset class, one that’s been around for thousands of years. Yup, real estate. So, how can a new investor with limited funds, invest in this market? Through a real estate investment trust or REIT.

A REIT is a company that invests in real estate properties and by investing in a REIT, you can share the benefits and risks of owning a real estate portfolio. In short, a REIT allows you to buy and sell properties as if they were stocks by buying a stake in a REIT.

You are effectively vested in all the properties owned by the REIT, so as the REIT makes its profits from asset appreciation and rental income, you will receive regular payouts which can provide you with passive income.

We’ve come to the end of part 1 of our video series. We hope you’ve learned the importance of making your money work for you and the different asset classes and opportunities that are available to you. In the next part of our series, we’ll explore the big market cycles and find out how to better time your purchases so you can receive the biggest benefits possible.