Monday, August 3, 2009
Fundamental and technical analysis are both good for different things. Technical analysis, while it may be useful for short term trading, is not good for long term investment. Fundamental analysis, while it excels in long term investment, is not good for short term trading. Technical analysis deals with charts, which deal with patterns. Patterns are impossible to predict over a long period of time, so technical analysis is useful only in the short term. However, fundamental analysis deals with the overall potential of a company, so it is more useful for the long term; with fundamental analysis, one can invest in very long term ventures, such as ten or twenty years. In fact, fundamental analysis works best this way.