Unless you are an everyday player in the stock market, you may not be familiar with the global macro market term. A global macro strategy bases its holdings on the overall economic and political views of whole countries. These can be things such as long and short positions in various equity, fixed income, currency, commodities and futures markets. To put it in simple terms so most people can understand it, it is an investment strategy that is based on the prediction of large scale world events. This could include huge turnover in government or even possible future wars that could affect the world market.
The global macro market strategy makes forecasts on analyzing interest rate trends, political changes for entire countries, new government policies, and other factors that can affect a great amount of people. They are educated guesses about the macroeconomic developments of the world we live in. With the advancements in technology, we live in a smaller world where globalization is everpresent. Everything that happens in the world around us will affect us in some way. If there is a flood in another country that takes out the majority of crops, there might be some way to invest in it to make it profitable for the investor. If a disaster of a pipeline explosion happens somewhere in the world, the demand and cost for oil can go sky high. This is another example of macro marketing strategies that can be followed.

There is a huge difference between global macro fund managers and traditional equity managers. Most equity managers started in research as analysts and look to follow these macroeconomic stories a bit more on the side. On the other hand, global macro traders and managers focus primarily on world changing actions. Normal investment managers in financial institutions may not be keen in macro marketing strategies. It can be difficult to predict, and if it is not a key factor in their investment strategies, they may not be in a suitable position to try it out.

However, macro investors in investing rely on the speculative world around them. There are major risks involved though. The reward can be immense, but the loss can hurt just as much. That’s why it is important to have your knowledgeable macro traders provide in-depth macro market analysis report with key issues facing the global economy. It is not something that you should test out until you realize exactly the thought process behind it. Don’t think that overnight you are going to become a macro marketing guru offering advice to anyone that would listen.

One of the most common macro investments is determining the relative strength of one currency versus another. A currency pair is quoted as one currency’s relative value to another currency. Investing in currency is available 24 hours a day, six days a week. It can happen quickly, with fast payouts in a matter of days from good investments. Plus, for every dollar allocated to a currency transaction, a total of $99 can be borrowed. This, again, is a great risk if something goes wrong, but can enhance their gains substantially.

For example, one United States dollar is equal to .85 of a Euro. The U.S. dollar is worth 15 percent less than a Euro dollar. But what if something happened in the European Union that affected the value of their dollar. Serious money could be made with a quick investment.

In closing, if you are interested in the global macro market, then find your own guru that has done well in this environment. It’s not something that a part-time investor can be trusted with without prior experience. Find someone that you can trust and has prior successful experience in this market. Don’t change your investment strategy on a whim. Let someone guide you along in the process!