As I ponder, "The Economy" the above quote comes to mind. If memory serves, almost half of all voters vote The Economy; and certainly many make decisions based on how it affects their pocketbook.
But, what exactly is "The Economy" to most people? Those with a degree in Economics, Finance, and even an average day-trader will have a pretty good understanding of The Economy is, but what do most think?
- Is it simply the DJIA? Trump seems to love the Dow; apparently because the DJIA to many is the most informative snapshot of the economy out there. What irks is that many do not even understand how the DJIA is calculated, weighted, and (*cough*) manipulated.
- Is it the S&P 500? This is arguably a better indicator, as it captures performance of about 500 U.S. companies.
What about the rest of the world, and how it affects The Economy? Granted, many in the U.S. don't give two sticks about the rest of the world, but as a measure of The Economy it probably shouldn't be ignored.
- FTSE and other foreign indexes?
How about commodities as a measure of The Economy?
- Gold price?
- Oil prices?
As a relatively seasoned trader, perhaps I'm already beyond the average Jane/Joe. Do normal people think about monetary policy on a daily basis? Speaking of monetary policy, is the Fed basically in charge of how the Economy is doing?
Perhaps I need to reel it back, and look at The Economy, from a self-centered perspective; a me perspective:
- How easily is it for me to find a job?
- How much do I get paid?
- What is the minimum wage?
- How is my 401k doing?
- What kind of car can I afford?
- What kind of home can I afford?
- How much does a pint of beer cost?
- How much does a gallon of gas cost?
- How much does a pint of milk cost?
Would the above add up to the Consumer Price Index?
In sum, I'm trying to understand exactly what "The Economy" means to the ordinary man or woman. Thoughts?
Maybe I need to ask around. Would you think that it's too nutty to approach random people and ask them, "What does `The Economy` mean to you?
