Studying Technical and Fundamental Analysis
If you're interested in the analysis of stock and mutual fund performance then you need to understand the technical and fundamental analysis of each company. Basically, technical analysis is about evaluating company value using the tools of mathematics and its principles. Fundamental analysis is about determining the company's operating characteristics and history. The information is important because it lets you know whether the market can profitably purchase the stock of a company at a given price.
Technical analysis of a company's fundamentals is done with the use of technical indicators. The most commonly used technical indicators are price/earnings ratios, volume, price oscillators, and moving averages. As a general rule, the higher the prices and volume, the more accurate the technical analysis of the company. A good price/earnings ratio will tell you whether the stock's price has peaked or not. A moving average tells you whether the stock price has risen or fallen in a certain period of time.
Fundamental analysis is another popular method of studying stock and mutual fund performance. This is when you compare a company's historical past performances with the future projections. You would first develop a set of formulas for calculating the results.
Next, you can compare the performance of these formulas against the performance of the stock's past. When it comes to fundamentals, you'll need to study the company's history. You will need to look into a company's past profits, past dividend payouts, past stock splits, and past stock prices. Remember that there are many other variables involved and it is possible to miss a significant factor if you aren't careful.