Correction on the Way?



Here comes a correctionThe joblessness rate is at the lowest it’s been in the last seven years at a current 5.5 percent. While this is good news for the economy, it does highlight an important issue that will manifest soon: the more people that have jobs, the more flooded the job market will be, and the slower the creation of new jobs becomes.

There has been a lot of talk about a market correction, and with job growth slowing, the likelihood of a correction becomes that much more imminent. Now, couple these things with the fact that labor participation is at a 37 year low and that wages have not grown much in comparison to inflation in the last 35 years, and you have a legitimate issue. It’s not quite possible to tell exactly when markets will begin to correct themselves, but these facts don’t exactly paint a rosy picture. In fact, they are a little frightening.

As you know, there are many ways to avoid a slowdown or reversal in the market. Long term investors do not need to worry. This can actually be a productive time for them if they are beginning to shape their investments right now as lows in the market provide a good entry point, especially on index funds. However, short term traders often do not do well in these situations because there’s too much confusion. The best way to succeed, though, is to know what all of your choices are as a trader and use the appropriate methods at the appropriate times. This can mean selling stocks short, using put options, and relying more heavily on binary put options, too. All of these are great tools, and when used correctly, can provide bigger profits than you would have found just by holding onto your old investments.

Knowing that the economy is likely to slow in its growth prepares you to take action. For example, which companies rely on growth to drive profits? The easy answer would be to look at companies that profit off of growing populations, such as the healthcare industry. Finding the companies that would be most heavily impacted will help you to know which will lose price the fastest. Short sells would work, but they can be quite expensive when it comes to fees, and that cuts into your profit rate in a big way. If you’re a smaller trader, or don’t want to face the theoretical unlimited losses that short sales present, then put binary options are a good alternative. You can easily trade without additional (or any) fees, and some brokers will allow you to risk as little as $10 per trade. The downside is that binaries only allow you to trade certain stocks, and this is not a huge priority in the binary world.

This requires some creativity on your part, but the upside is that you don’t need a lot of movement in an asset to reap the full benefits of binaries. Even if you’re right by a fraction of a penny, you get the agreed upon profit rate from before the trade. You don’t need to stick to just stocks either. You can also trade commodities, indices, and currencies. Some brokers allow you to trade pairs, too, and this can be a great tool in this instance. Looking at which company will outperform another can be made much easier when you look at it through a framework like this. The job report happens once a month, and acting on information when it comes out in a way that captures assets that will benefit or be hurt by that info can give you an edge over the broker in many cases.