Monday, August 3, 2009
Fundamental analysis is the other school of stock investment. A fundamental analyst will not examine the charts of trends, because he or she does not care about the trends. He or she cares about the company behind the stock. A fundamental analyst will examine the financial statements, or financial records, of the company. He or she might also take a solid look at the company's management to see if the company is being run effectively or not. A fundamental analyst also pays attention to other, qualitative (non-quantitative) factors such as geographic location, the industry the company is in, the appeal of the product, etc. Fundamental analysts try to predict the future of the stock's price by trying to predict the future of the company in question.