Trade-off between Fundamental and Technical Analysis

Chowdhury, Emon Kalyan (2021): Trade-off between Fundamental and Technical Analysis. Published in: Portfolio , Vol. 2, No. 25 (15 July 2021): pp. 15-22.

Abstract

Fundamental analysis and technical analysis are two different approaches to evaluating stocks. Fundamental analysis is a long-term investment strategy that seeks to identify undervalued stocks by examining a company's financial statements, management, industry, and economic environment. Technical analysis is a short-term investment strategy that seeks to identify trends and make trading decisions based on those trends. Both fundamental and technical analysis have their own advantages and disadvantages. Fundamental analysis is more time-consuming and requires a deep understanding of financial statements, but it can be more reliable in the long run. Technical analysis is faster and easier to learn, but it is more prone to false signals. The best approach for an investor depends on their individual goals and risk tolerance. Investors who are looking for long-term growth may prefer fundamental analysis, while investors who are looking for short-term profits may prefer technical analysis. In some cases, it may be beneficial to use both fundamental and technical analysis together.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fundamental analysis, technical analysis, intrinsic value, market trends, investments
• Subjects: A - General Economics and Teaching > A1 - General Economics; A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics; D - Microeconomics > D7 - Analysis of Collective Decision-Making; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics; P - Economic Systems > P1 - Capitalist Systems

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