What is Fundamental Analysis

 

Definition and Purpose of Fundamental Analysis:

Fundamental analysis involves evaluating a company’s financial health and performance to determine its intrinsic value. It focuses on economic, financial, and qualitative factors to make informed investment decisions.

Key Components of Fundamental Analysis:

• Economic Indicators: Assessing the broader economic environment.
• Company Financials: Analyzing financial statements and performance metrics.
• Industry Trends: Understanding industry dynamics and competitive positioning.

   

Differences Between Fundamental and Technical Analysis:

While fundamental analysis focuses on the intrinsic value of an asset, technical analysis examines historical price data and patterns to predict future price movements. Both approaches can be complementary when making investment decisions.