What Does 5% Inflation Mean to Traders?

The Option SenseiThe Option SenseiJune 11, 2021

The Journal reported this morning that prices jumped in May by 5% year over year. 

Is this the result of an economic rebound and a healthy sign for the economy…

Or is it a sign that money printing, generous unemployment benefits, and money drops have finally started to affect the economy as a whole. 

Discover How to Find Success Either Way With a $19 Trial Membership to Options360

The first choice would be great.  And it’s a distinct possibility considering last May we were in the midst of a “Covid crash.”

However, if the rise in consumer prices ends up being a direct result of the economic and monetary policies the Fed and the US government have followed…

We may be in for another “Jimmy Carter economy.”  

I can tell you I’m not excited about that possibility, however, the good news is that we survived then and we will survive now.  

Not only did we survive, but a lot of people also made a lot of money in the late ’70s, and I feel confident that my Options360 portfolio will as well

That’s the advantage of having someone with decades of experience doing research for you and making recommendations.  

I’m not right all the time, but you can’t argue with our track record since 2015.  We’ve not only beat the S&P every year, but we’ve also trounced it!

Some thoughts to keep in mind about inflation.  While it can devastate economic activity on Main Street, we all have seen firsthand over the last year how Main Street and Wall Street are not connected.  That means we can see markets continue to surge ahead even in the midst of tough times in the economy. 

And even if markets were to lose ground, as an options trader, we can make more money faster as stock prices fall.

Here’s my point, while it is wise to keep your ear to the ground for the overall economy – you don’t want to let that have too much influence on how you trade.  

It is very possible to make a lot of money in very tough times.  And it’s possible to lose money in very good times. 

The trick is to always trade the market, not the economy.

And don’t focus on “getting rich quick.”  Keep the risk/reward in check and grind out your trades. 

THAT is the key to wealth building…

And that is what we do in Options360.

To Your Success,

Steve

PS.  Make sure to grab your $19 trial membership to Options360 right now

The post What Does 5% Inflation Mean to Traders? appeared first on Option Sensei.

Source: Option Sensei

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