Fundamental Analysis: An Overview
There 2 school of thoughts when it comes to analyzing and approaching financial markets.
-
Fundamental Analysis
Attempts to measure the underlying value of a security - Its intrinsic value - by looking at the economic and financial facotrs that affect the business.
-
Technical Analysis
Attempts to predict future price movements of a security by analyzing its historical price movements volume and trends
The role of fundamental investing, therefore, is to give investors an idea of what is behind the company they are buying into, and gives a guidance for common questions:
What to buy and what to look for in a stock?
When to buy?
When to sell? And when not to?
Dividends? Or No?
Where do I begin my search for good stocks?
Common Investing Principles
Value Investing
Hinges on the conducting through analysis to determine the true value of the company and buying it at an adequately cheap price to have an allowance to safety.
Growth Investing
Places less emphasis on the purchase price of the stock. Rather it argues on buying storing qualities for the long-term.
