Investment Basics

Anyone who wishes to trade in the stock market or the currency exchange needs to have a thorough understanding of fundamental analysis. One of most important aspects of fundamental analysis are the economic reports that are issued through governmental channels.

Interpretation of these reports give clues as to where price action may be heading so therefore it is vital to pay heed when important announcements are made. One of the major reports given is the US unemployment rate. Many traders, investors and speculators conduct transactions and make trading decisions based on this report. For example in the 1960s, for employment was considered to be 4% unemployment and the comparable unemployment rate by 1980 was at least 5%.

The acceptable rate of unemployment depends largely on the actual unemployment rate. The actual unemployment rates in nearly 1980s was about 10% at times. Therefore, the politically except worry of unemployment was also hot. Today the current access will rate of unemployment is around 5 to 6%, though through much of the 1990s the country operated below 5% unemployment. Then the recession that began in 2001 employment again spiked upward.

Now at the start of a new decade in the official unemployment rate is stated to be at 9%. Although shadow statistics placed the actual unemployment rate at 20+ percent. Because it would be politically unfavorable to tell the truth the statistics all our creatively reported in such a way as to make it seem it was 9% and doing other things such as leaving out certain economic statistics that make up the employment rate that were previously calculated in the rate before. Being able to gauge what the actual unemployment rate is despite this section is also a skill that must be taken into account when you perform your fundamental analysis. Now more than ever investors need to safeguard their assets as those who just blindly believe what ever economic report is announced may soon find himself misled and penniless.

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