06 August 2010

Getting Started in Investment in Stock Market: Fundamental Analysis Vs Technical Analysis

After about one year observation and six months study about stock market investment, I believe that this is the time for me to summarize what I have done and learned in order to rearrange my strategies of investment in stock market.

Basically, I have spent more of the time to study fundamental analysis instead of technical analysis. Although it is highly recommended to combine both analysis strategies, it would be a good starting point from fundamental analysis. This is because fundamental analysis can provide you a comprehensive information about a company or stock background information which is very crucial in selection of stock. Technical analysis, on the other hand, uses the assumption of history will always repeat itself and human behave to predict the trend of stock price.

As you can see, technical analysis alone is extremely risky without a help of fundamental analysis.

The one of the major advantages of analysis is that it is relatively fast in making decision compared to fundamental analysis. Besides, what you should do is to analysis a chart instead of lots of figures in financial statement.

Next, the return of technical analysis seems relative faster than fundamental analysis. But, please bear in mind, fast return doesn't mean huge return.

Warren Edward Buffett, world second richest man, is one of the fundamental analysis investors. Why?

Rome was not built in one day. In next post, I am going to talk about how to getting started in fundamental analysis in stock market. Feel free to give me a comment about this topic. It will be a great support to Xaivier Blog.

Written by: Xaivier Chia

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