Fundamental Analysis of Stocks - Definition, Example, Factors, Tools, Types & Risk

Fundamental Analysis Of Stocks www.ifmcinstitute.com

When was the last time you used fundamental analysis? Learn secrets to grow your trading skills using fundamental analysis of stocks.

What is Fundamental Analysis? •Fundamental Analysis is an approach to measure economic health and financial performance of an underlying company. •Each quarter publicly traded companies publish accounting reports using various metrics. Financial metrics, for instance, sales & debt data. •This data helps shareholders to understand the company performance.

Difference Between Technical Analysis

Fundamental Analysis

Definition

Statistical method used to determine pattern and predict future price movements.

Determine company’s stock to find intrinsic value and analyze factors affecting price in future.

Objective

Measure right time to enter and exit market

To find Intrinsic value

Vision

Looks Backward

Looks both backward and forward

Methodology

•Price Movements •Market Psychology

•Financial Data •Industry Trends •Competitors Behavior •Economic Overview

Time Horizon

Short-Term Approach

Long-Term Approach

Function

Trading

Investing

Data Collection

Charts

Financial Statements

Concept

•Dow Theory •Price Data

•Return on Equity (ROE) •Return on Assets(ROA)

Stock bought

When price falls below intrinsic value

When trader believes they can sell it for a higher price.

Popular Tools

•Currency Correlation Tool •Forex Volatility Tool •Technical Indicators & Oscillators •Price Action Analysis •Chart Pattern Analysis

•Economic Calendar •Financial Newswires •Analyst Reports

Who Can Learn Fundamental Analysis?

• Money Lender: A moneylender gives off the loan for against a high return investment strategy. Beforehand, a lender investigates a company before giving a loan, besides buying bonds in a company they issue.

• Stock Investors: Stock market investors those looking for buy company’s ownership stake can benefit from learning fundamental analysis.

• Swing Traders: Swing traders hold their positions for a longer than a single day. Like every trader, swing trading isn’t for everyone.

• Intraday Traders: Intraday traders is the one who is mostly affected by rumours, events, and triggers price volatility. This often results as price gaps up or down in the market.

Where Can You Learn Fundamental Analysis? • IFMC Institute offers a comprehensive course for fundamental analysis. The course focus on the study of divide focus and charts to help measure the growth and sustainability of potential income stream. The fundamental analysis online course is designed for working professional who can take the program anywhere and anytime. • Whereas classroom fundamental analysis course is available in Delhi, Noida, Ghaziabad. The program will develop advanced knowledge of how to use company data to support investing decision.

Example of Fundamental Analysis For Dummies

Risk of Fundamental Analysis Fundamental analysis is an attempt to measure a securities intrinsic value.

With it’s rooted in qualitative and quantitative information, isn’t without any flaws.

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Vulnerability on wrong data: Fundamental analysis is strongly based on the company’s data. But if a company reports a wrong data or you misinterpret them, it increases chances of risk.

Dependence on past data: Biggest risk against fundamental analysis is that how many shares it comprehends in a company past performance.

Over depending on the company past data can be risky.

Gambling against the market: If you think a stock is a showing investment potential just because you are affected like every one of the same data. If you see a stock is cheap which other investors are not able to see, then you are gambling.

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• MADE model of IFMC is yet again an innovation of our Sr. Research Mr. Manish Taneja. MADE has made easy to Learn the Language of Market and analyzing it Using Data and Event.

• MADE is the next step in learning to trade with simplicity in the stock market. All those who have purchased UDTS can upgrade themselves to MADE.

• MADE is another copyright content of IFMC, which helps you to learn the language of the market and also enables you to predict the direction of the market.

• In MADE – We study with simplicity the fundamental aspect of trading.

• MADE. model is based on the same principle of UDTS. As in UDTS, all technical aspect should be in one direction. Similarly in MADE. Model all DATA and EVENTS should be benefited in the same direction.

• All those who find fundamental analysis too cumbersome to understand, after going through MADE. you will be able to analyze DATA and market with ease

Conclusion • Technical analysis is still an important part of stock analysis. It helps investors and professional traders to investment and trading. Above mentioned, fundamental metrics changes on a quarterly basis. They do not change from day to day, unlike technical analysis. • Fundamental analysis can be used as a way to narrow down universal stocks. Moreover, allow comparing countries economic value. For timing and risk management an investor may invest in technical analysis.

This is an introductory guide. For more information visit IFMC Institute.