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The Wider Economy

Before delving into an individual company’s fundamentals, we need to take a brief look at some basic economics. Those of you who have previously been scared of economics, don’t be here! In the overall scheme of things, we’re just talking common sense here, and a good place to start is with the country at large and the wider economic climate. This is called taking a “top-down approach.” It means we are looking at the broader picture—in other words, how is the general economy performing? Are any storm clouds looming? This is a sensible approach and your success will depend on keeping your senses alive and alert to what is going on around you anyway. It really doesn’t take much; just keep up to date with the news, and you will have enough background knowledge to get a feel. And from here you can start to chain events into likely scenarios developing later on.

Remember, this is not an economics book, but there are some key figures that have major significance in each economy wherever you live in the world. Those in the following table are specific to the USA; however, they’ll have equivalents in every Western economy.


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