Interest Rates and Inflation

The next 12 months look great. Economists are now raising their GDP expectations for the U.S. economy to a minimum of 2% growth for the next four quarters. That’s a significant improvement to what they were expecting just a few weeks ago. (One thing to keep in mind however, is that this is moving target, one week they’re doom and gloom and the next it’s all sunshine.) 
The reason should be clear – cheap money and stimulus spending is kick starting both lending and spending, albeit from low levels.  
*****The FOMC concludes its latest meeting today and everyone expects interest rates to remain where they are. The stage is being set for inflation to start working prices higher.  
And that means oil prices, and prices for other commodities, will start moving even higher. In fact, as I write this oil is over $71 after gapping down yesterday to as low as $69. 
Oil has been trading around $70 for a few months, even with growth expectations very low. Now that expectations are rising, we should see oil prices start to move higher, too. This is particularly true as emerging economies begin soaking up supply. 
If you haven’t started buying commodity stocks to prepare for higher inflation, it’s not too late. My Global Commodity Investing advisory service can get you started with profitable recommendations of top commodity stocks from around the world. Click here to find out which stocks will protect and grow your wealth as inflation picks up. 
*****Once again, I’d like to thank Daily Profit readers for your t-shirt slogan ideas. As you know, my first book, The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks, is released on September 14. And I’m holding a t-shirt slogan contest on the SmallCapInvestor Facebook page to help kick things off. The winning slogan gets a full year subscription to ALL my advisory services. The voting starts tomorrow morning, here’s the link where you can cast your vote: 

As they say, vote early and vote often. Thanks! 
*****It’s Newsletter Advisors Wednesday. Please enjoy the interview…. 
Ian Wyatt
Daily Profit’s Wednesday and that means another chance to sit down with one of America’s leading investment experts and pick his brain. This week we have Adam Hewison, founder of INO TV and MarketClub. Adam is also a former floor trader and member of exchanges including the International Monetary Market (IMM), New York Futures Exchange (NYFE), and the London Financial Futurs Exchange (LIFFE). Adams is also the author of "Right on the Money, The Definitive Guide to Forecasting Foreign Exchange Rates".
Today Adam shares with us some of what he learned as a floor trader and how you can apply this to your own investing strategy.
Ian: When you first started out, did you say you learned your skills from just one floor trader or from many to help you focus your methods?
Adam: My greatest motivation to learn how to trade was the fear of failure. Don’t misconstrue this, it was not about losing money, that’s just part of trading. It was more about becoming an abject failure at trading.
When I purchased a membership on the exchange, my main mission was to try and emulate what other successful traders were doing that have similar personalities to my own.
I was never a short-term trader, by that I mean minute by minute trader. The people who made the biggest money on the floor were and remain to this day, the position traders and swing traders, that’s who I tried to emulate.
Ian: Successful trader – nature or nurture?
Adam: There has been a lot of discussion about someone being a natural born trader, but I’m not so sure I buy into that belief. I think if you’re halfway smart you can be taught how to trade successfully. The key to trading is emotions and discipline. Once you master these two elements you will be successful in the market.
Ian: With the plethora of information on the Internet, in book stores and in the media, how would a trader determine whose advice is good and whose is not?
Adam: That’s a that definitely needs to be debated. Quite frankly, I think there’s too much information out there for traders. The philosophy I learned on the floor and the philosophy I adhere hereto today is to keep it simple. Yes, I’m a disciple of the kiss theory, keep it simple stupid. I think many traders over complicate the market and over think their positions. After all, a market can only do three things, it can go up it, it can go down and it can go sideways. I can’t think of too many things in life that are that simple.
Ian: Do you think people are too quick to follow big networks and websites who claim to have "their expert"?
Adam: The short answer is yes. This I believe is the biggest mistake of all and that’s following the net heads or the talking heads that we see in the media. One of the elements we stress on our INO TV website is the importance of having a game plan. If you don’t have a game plan you have no idea where you’re going. Its sort of like your roadmap to get you to your next destination. I know it sounds simplistic, but that’s the way it works. Exchange members just don’t come on the trading floor thinking about what they should do that day, they know what they’re going to do based on their game plan. And that’s how individual investors need to approach investing as well.
Ian: Where do you go to keep up on market happenings or to hear other analysts’ opinions?
Adam: That’s an easy one, I use the INO TV website as it has everything I need. I have been involved in the markets for over three decades. I am pretty comfortable with my own trading ideas so I really don’t go looking to see what other analysts have to say. That’s what confidence gives you and also knowing how the markets really work.
The markets really haven’t changed any in the last 100 years. The reason I say that is because human nature hasn’t changed in 2,000 years and I don’t think it’s going to change anytime soon.
Thanks Adam for sharing your insights on how investors need to view the market and the overwhelming volume of information out there.
If you’re interested in finding out more about Adam’s approach to investing be sure to check at out INO TV. Click here for more.




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