LUX - April 2017 27 The Core Foundation of All Economies Please give an overview of your company and the market it operates in. I own and operate the longest standing proactive online Do It Yourself investment newsletter on the Internet today (Stock Traders Daily), and I own a money manager where I manage money for affluent investors (Equity Logic). I have also created one of the most accurate leading longer term stock market and economic indicators ever developed. It is called ‘The Investment Rate’ and it measures the rate of change in the amount of new money available to be invested into the United States economy dating back to 1900 and extending beyond 2040. What is the Investment Rate and can anyone see it? The Investment Rate is a macro economic analysis that measures liquidity, but natural liquidity and not fabricated liquidity like stimulus programs. It does this using built in societal norms to identify lifetime investment cycles, and it is a derivative demographic analysis predicated on the core foundation of all economies, which is people. The way we spend money is important, but largely that only acts as a chaos like boundary around the economic cycles defined by the way we as a population invest our money over time. The Investment Rate identified the great depression, stagflation, the credit crisis, and the up periods in between. Anyone who is a subscriber to Stock Traders Daily can read the Investment Rate. What does The Investment Rate say about today? The economy we’re witnessed to today is being driven by stimulus programs, and stimulus programs are fabricated liquidity, unnatural in nature, and the impact is unsustainable unless stimulus lasts forever, which it doesn’t. Stimulus policies started with the FOMC but the ECB has committed to additional stimulus through the end of 2017 at least. The Investment Rate tells us that there is a dramatic difference between demand levels than we compare demand for assets that exist in our economy today to where demand levels actually are on a naturalised basis, which is what the Investment Rate ultimately tells us. It measures natural demand, and there is a large gap to fill between that natural demand curve and where demand levels for assets currently exist. Okay, so what does that actually mean to an investor? In basic terms, the fabricated demand that exists today has caused the demand for assets such as stocks, bonds, and real estate, to be much higher than it otherwise would be, and with those fabricated dollars chasing assets we have seen asset price appreciation and quite arguably a bubble. The stock market, for example, was at 26 times earnings in the first part of 2017. Investors should, absolutely, understand the fabricated nature of the demand we have been witness to and recognise that a reversion to the mean, or the natural demand cycle as that is defined by the Investment Rate, is very likely once stimulus officially comes to an end. That’s great information, but is there any way to make money from it? Absolutely! But not in a traditional sense. Traditional buy and hold investors will be hit hard once demand levels revert back to more natural conditions because risk appetites will themselves decline when liquidity levels decline, and the stimulus programs that we have been witness to have pumped money, liquidity, into most asset classes, so almost everything is vulnerable. The alternative is to incorporate strategies that do not rely on the market to increase, and that is exactly what we provide at Stock Traders Daily, proactive strategies. Do you actually create these strategies? Yes, I develop the strategies, and refine them over time. All of the strategies we offer at Stock Traders Daily have the same underlying capabilities too. Some of them work different than others do, some are more active and some are less active, but all of them have integrated risk controls and that’s the key. When we control risk, we empower ourselves to take advantage of markets when they move, instead of being at the mercy of them. Active and less active sounds ominous. Can this work for people with jobs, 401Ks, and IRAs too? Everyone seems to think managing risk requires more work than they are capable of, but one of our Stock Traders Daily, Inc provides content to major media outlets like Reuters, Zachs, and Marketwatch. The firm’s Thomas Kee shares his thoughts on the Investment Rate and Managing Money and the results of Equity Logic in this in-depth question and answer session. The Core Foundation of All Economies Company: Stock Traders Daily, Inc Name: Thomas Kee Email:
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