Applied Financial Macroeconomics and Investment Strategy

The absolute and relative performance of various asset classes is systematically related to macroeconomic trends, both cyclical and secular. Among these trends are those of inflation, interest rates, real GDP, and income growth. The business cycle includes a monetary policy cycle, a profits cycle, credit cycles, inventory cycles and durable goods cycles. Each cycle has a pattern that rhymes while not exactly repeating others. In this new book, Robert McGee provides a thorough guide to each stage of the business cycle and analyzes their investment implications using real-world examples linking economic dynamics to investment results. Designed for investment strategists working in industry, the book begins by looking at the business cycle, its various stages, and the inter-relationships between the overall cycle and sub-cycles. Examples of investment insights for asset classes and sectors illustrate the connections between the performance of returns and particular junctures in macroeconomic cycles. The book then focuses on cycles and trends related to monetary policy, credit, equity markets, commodities, and foreign exchange markets presented through the lens of investment implications. Other major trend drivers are also discussed, such as technological change and globalization, and the author even uses case studies to better illustrate the various concepts and principles laid out in previous chapters.