I want to invest in stocks which analysis do I follow, Fundamental or Technical Analysis, which is better way to do it...?
For long term investment it is always suggestable to look in to fundamental Analysis however you can use technical anlysis to get in to a conclusion (is it right time to buy that specific stock which you are planninng to invest or you should wait some time before you invest.)
Hope that helps.
I would suggest a combination of both. By the way, when you say ‘Long Term’ what is the time span you are looking at?
Fundamental Analysis can be very useful in picking a company to invest.in For example, management history, what are their current projects, potential future projects, their financial statements, how is their reputation in the market etc. All this is the work of fundamental analysis.
Will be useful to drown out all the unnecessary rumors and just focus on price action, as they say… price discounts everything. Hence you will do well to study the historical (5yr, 1yr, 6 months, 1 month) charts of the company before you invest. This could help you plan your Entry and Exit as well.
Hope this helps
Do what you are good at. If you are a finance-guy and you can decipher the Annual Reports of the company, go ahead with Fundamentals. If you can’t really follow what to make out of the financial statements, better follow Technicals.
It is said ‘Price discounts everything’, meaning price of a scrips indicates every aspect related to that scrip. This makes traders like me follow the TA route as i can observe price action with greater precision. But very very important point to be noted is TA fails you when something really big happens Fundamentally.
ex: One should have a basic knowledge that Crude prices will shoot up if US declares war on an OPEC country and you shouldn’t be sitting on a SHORT position. Or for example, the impact on Financial Technologies stock after the NSEL scam.
Basically if you are a chart based trader, having slight knowledge on fundamentals helps you atleast in deciding when not to take a trade. It may not help you in taking a trade, but certainly would help in deciding when to avoid trading.
Investing your valued savings in securities for more than one year is called long term investment in that security.
Fundamentals play a crucial role in determining returns generated over the term. One has to look through the financial statements - PL, Balance Sheet, Cash Flow along with the business model, moats, cycles, threats (such as technology disruption) etc and arrive at an investment thesis before deciding to either buy or sell a stock. Savvy investors can even build financial models to stress test the thesis.
Yes , A balance of both is necessary.
FIRSTLY YOU NEED TO UNDERSTAND WHAT IS INVESTMENT.ITS LIKE BUYING AN BUSINESS. WHEN YOU BUY AN BUSINESS YOU ARE ONLY CONCERNED WITH ITS FUTURE PROSPECTS, TECHNICAL ANALYSIS HAS NOTHING TO DO WITH YOUR INVESTMENT DECISIONS, AS FAR AS FOLLOWING ANY FUNDAMENTAL ANALYST, DO NOT RELY ON THOSE WHO COME ON TV OR WRITE REGULAR COLUMNS IN MAGAZINES, THESE PEOPLE ARE JUST FORCED TO FIND NEW INVESTMENT IDEAS EVERY WEEK OR SO, IT SURELY DOES NOT WORK THAT WAY.
FINALLY IF YOU ARE GOOD AT READING BALANCE SHEETS AND HAVE LITTLE COMMON SENSE GO FOR IT ON YOUR OWN. OR ELSE YOU CAN ALWAYS FIND A GOOD MUTUAL FUND
If you have a short question, it is best to ask in the main question box itself, it will save the time and effort to click on your question to read what it is.
dono chak ke dekhlena, jo bhi pasand aave, usi kho chunlena!
Isn’t there any shortcut?
Like if i screen stocks on screener.in based on G factor or any such screener.
Then also will I have to check fundamentals.