Stock Trend Investing

Deficits and surpluses in nations Current Account are financed and spent in it Capital Account. What is this Capital Account? In the broadest definition, the Capital Account is the difference between money flowing in and out of the country as a result of capital investments. The Reserve Account is a part of the Capital Account.

This article focuses on the Capital Account and Reserve Account. We will clarify some of the different definitions around Capital Account and explain what both Accounts imply.

When I started with my search for what later would become the Stock Trend Investing system, what was I actually looking for? It was not financial freedom or a way to better the world. The thing I wanted was just to find a way to make money and to avoid losing money on the stock market.

I saw that all stocks moved up and down in tandem. I realized that it will be very difficult to do stock picking. There are so many other people doing that. And all that effort is already incorporated in the market price.

The market inefficiencies are not so much in individual stocks. Looking at market movements, I could see that these inefficiencies occur much more often in all stocks together when stock bubbles inflate or deflate.

The Current Account is rarely exactly balanced. What does it mean when there is a Current Account surplus or deficit? These Current Account deficits and surpluses need to be financed and spend. This is happening in the Capital Account as a result of the Balance of Payments.

Read here our next post on why is the Japanese yen so strong.