Stay Informed about Social Trends Relevant to Stock Investment - dummies

Stay Informed about Social Trends Relevant to Stock Investment

By Paul Mladjenovic

Information relative to your stock investments is not limited to the business world. Political decisions and societal and cultural trends can have major impacts on the performances of many business, and thus, on your portfolio.

Political and government climate

Being informed about what public officials are doing is vital to your success as a stock investor. Because federal, state, and local governments pass literally thousands of laws, rules, and regulations every year, monitoring the political landscape is critical to your success. The news media report what the president and Congress are doing, so always ask yourself, “How does a new law, tax, or regulation affect my stock investment?”

Laws being proposed or enacted by the federal government can be found through the Thomas legislative search engine, which is run by the Library of Congress. Also, some great organizations inform the public about tax laws and their impact, such as the National Taxpayers Union.

Trends in society, culture, and entertainment

As odd as it sounds, trends in society, popular culture, and entertainment affect your investments, directly or indirectly. For example, a headline such as “The Graying of America — More People Than Ever Before Will Be Senior Citizens” tells you that as more and more people age, companies that are well positioned to cater to that growing market’s wants and needs will do well — meaning a successful stock for you.

Keep your eyes open to emerging trends in society at large by reading and viewing the media that cover such matters (Time magazine, CNN, Fox News, and so on). What trends are evident now? Can you anticipate the wants and needs of tomorrow’s society? Being alert, staying a step ahead of the public, and choosing stocks appropriately gives you a profitable edge over other investors.

If you own stock in a solid company with growing sales and earnings, other investors eventually notice. As more investors buy up your company’s stocks, you’re rewarded as the stock price increases.