Posted by on Aug 22, 2018 in General |

A Glimpse on Stock Market Analysis

The value of the firm depends upon the face value and the market value of the shares.  If the company is performing well in the market the value of the firm will be more than the firm which is not up to the level of performance.  A stock market analysis gives a picture of the value of the firm share and to gain some knowledge on the equity market.  It helps the investors and traders to get knowledge on buying and selling decisions of the shares.  Apart from the equity market many traders and investors started to concentrate on online trading like cryptocurrencies.  Among the few cryptocurrencies, Bitcoin and Bitcoin trader platforms were the keen area of interest among the investors and often make them think, will is it a safe mode of online investment platforms.

Before investing on these online platforms or any other investments like purchasing an asset, the traders or the investors need to do first some pilot research on these investments and later analysis in detail can be done according to investors wish.  If you are going to purchase an asset, a complete market analysis makes you understand better about the pros and cons of the purchase decision.  Similarly, if you want to invest in equity or online transactions, a complete survey of these investments methods have to be well researched before the investment is made.

Generally, there are two types of research methods employed in the study of a stock market or equity market.  The first is the fundamental research and the other one is the technical research.

Fundamental Research:

  • A fundamental research involves the analysis of financial statements of the firm to gain knowledge on the performance of the company, its market value, the competitive advantage of the firm, its uniqueness against the competitors, their crucial role in the market, the liquidity position and a lot more factors to determine its financial strength.
  • A fundamental research uses many key ratios to ascertain its financial role and strength of the firm. Hence the traders and investors are in the objective to analyze the importance of the financial functions of the firm.  The firm performance in the present, as well as future business course of action, will also help to determine the investment is possible in these firms will be fruitful or not.

Technical Research:

  • Technical research is nothing but gathering information of the firm’s past performance in the market to know the future trends or events of the firm. The past performance indicates how far the firm has increased the stakeholder’s wealth.
  • The technical research helps to find the firm share value will rise or fall in the future to determine the investment decision.

So it is always necessary to do both fundamental and technical research before going on any mode of investment methods to avoid serious losses.