Stock Investing - Money Supply M1 And M2

Money is a means to evaluate market investors. You see, the stock market investment is not just choosing the right companies. It is also more than the reading of charts and diagrams of the formations. It is also the pulse of the economy and how macroeconomic forces such as monetary policy affects financial markets. It's more than just trying to find good stocks to invest in. This is starting to understand how the economy is fairing as a whole.

Many investors and analysts look closely at the money supply. This is because there may be an indicator of inflation, which is not good when it happens too fast. Essentially, when the money supply is greater than the supply of goods and services, you can expect that inflation. This is because more money is to buy things. Then people start to pay more simply for their goods and services.