Overview of Analysis: a learning : BASICS

** Comparing Fundamental and Technical Analysis Fundamental analysis and technical analysis, the two major schools of thought when it comes to approaching the markets, are at polar opposite ends of the spectrum. Both methods are used to research and forecast future trends in stock prices, and, like any investment strategy or philosophy, each has its pros and cons. **Fundamental Analysis: Fundamental analysis is a method of evaluating securities by attempting to measure the intrinsic value of a stock. Fundamental analysts study everything from the overall economy and industry conditions to a company's financial condition and management. Reports such as earnings, expenses, assets, and liabilities are all important characteristics of fundamental analysis that help analysts determine the fair value of a business. **Technical Analysis Technical analysis differs from fundamental analysis in that the stock's price and volume are the only inputs. The main belief is that all known fundamentals are already reflected in the price, so they aren’t closely examined. Technical analysts do not attempt to measure a security's intrinsic value, but instead, use stock charts to identify patterns and trends that suggest how a stock's price will move in the future.

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