Measuring Tape - The Baltic Dry Index

To achieve tangible results in the realms of the stock market ,it is vital to discern between the factual and the esoteric information .The Baltic Dry Index is a great tool to gauge the market environment, at the same time assisting in offsetting the perennial market volatility .

The Baltic Dry Index ( BDI ) is a real time indicator of the global demand for commodities and raw materials as it is also a measure of what it cost to ship raw materials around the world .The demand and supply of raw material provides insight into the future trends of production and consumptions of goods .Compared to other parameters like inflation indices etc, it is difficult to influence the BDI , as a growing economy reflects instantly with the increase in price of raw materials , commodities , as well as commodity based currencies .The index is not tradeable ; it indicates the price in real time on daily basis , thus bringing in more reliability to take an informed investment decision.

The BDI started plummeting in the middle of year 2008 ,subsequently global equity market tailed it .The first quarter of 2009 has seen the index moving higher ,clearly putting emphasis on the basic principle of supply and demands bolstering the global economy .Though the index has gone up by more than 140% till now in the year 2009 .However, at the same time ,it is still off close to 80 % from the high it achieved in middle of 2008 .There are contrary views also existing to this philosophy, but my fetish to track this while making investment has yielded optimistic results.

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