Global macro fundamental research for best stock investment decisions

Making best stock investment decisions in today’s stock market is a tough task. Any stock market ticker that makes a move could be good for your investment portfolio. But such stock market investments should be selected carefully.

I personally see today’s stock market as a very volatile environment where it is hard to place long-term bets for the next 10 years. It is tough to know what will be the best stock investment for next 5 years, too.

So I personally manage my stock market portfolio mostly with short term swing trades. The second type of trades I do are position trades that last for weeks or months. I do not want to invest in longer time horizons, as they could be very risky in the stock market today.

For position trades I apply both approaches to stock market analysis. I use technical analysis and partly also fundamental analysis.Why partly? Well I am not big fan of fundamental analysis of individual companies. I see it as a very complex issue that has quite a lot problems.

A fundamental analyst should be good in economy and in using numbers produced by a company to use some models to define “fair” price of the company shares. Other issues are that such fundamental stock analysis is a very time consuming process. And finally you have to trust the numbers that are produced by the company.

My personal basics of stock market investing

I prefer a different approach to stock market investing. I do not have so much time to do all fundamental analysis of individual stocks. I also do not like fundamental analysis of individual stocks for reasons I mentioned above.

So I decided that the fundamental analysis I will use in my position trades is going to be global stock market fundamental research. This approach to fundamental analysis is to create an opinion about the current global macro economic situation in several regions, countries or maybe some sectors.

This approach creates some overview for my decision how the world economy may move in the coming months. I can also have some opinion about the coming years but the situation can change very much during such a long time so I prefer to use a six to twelve month approach to my personal global macro overview.

How to select best stock investment in today’s stock market

I use this approach very simply. I read different materials from different sources and then make some notes. These notes then summarize the situation in different parts of the world and should answer questions necessary for some investment decisions.

Typical questions or notes are like these examples:Australia has a commodity boom but the rest of the economy is struggling. Is AUD overvalued ?

Public debt levels in the world are very high. Easy policy will lead to inflation. How do I make money on this trend and what should I prefer ?

Spain had a much bigger real estate bubble than the USA. It has not been corrected yet. What does this means for their banks ?

Demand for food from emerging countries is growing every month. The USA is one of the biggest agriculture commodity producers in the world. Farmers in the USA are going to make a lot of money. What does it mean for stock markets and commodities? How can I play this theme?

These notes do not lead me to direct stock trades immediately. But they show me the direction of my look. I do not want to enter any trades immediately only based on these ideas.

I select several possible candidates for my stock market portfolio of position trades based on the US stock market ticker list and US exchange traded funds list. And then monitor their stock price movements and wait for a situation where price is turning in my direction. Then I want to prepare some trades.

Problems with fundamental approach and how to correct them

There are some problems with using a fundamental approach for investing in my time horizon that is a max of 12 months.

I could have an idea, but the market (other investors) thinks opposite. So the stocks or etfs I monitor do not show any tradable situation. They do not offer any tradable opportunity in the direction I want to trade. The only solution is to be patient and wait for better situation. Only the best risk reward ratio for any trade could be traded. I do not want to force myself into any trade just because I think it is good time to buy, only to watch the price continue in the downtrend to much lower levels.

Another issue is that this global macro fundamental research could lead to reading a lot of different articles and materials about world economy topics and it could take a lot of time. The key is to select only a few, but best, sources of information for these best stock investment decisions.

My stock market investing advice for you

I have personally selected several good information resources I read every month. I prepare short notes for my needs, create some summaries and pick global macro best stock investment ideas.

If you want to share these resources with me, let me know. I provide this information to my clients, so you can join my club and use these resources and information materials I create, too.