Fundamental or Technical Analysis?


Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice.

──────────────────

What's the best way to tell if you're buying your stock based on fundamental or technical analysis?

If you're buying your stock based solely on technical analysis, then chances are, you're unlikely to buy it at all-time highs because technical analysis will usually wait for pull-backs to buy at correction points. The exception would be bullish techncial indicators showing a strong rally ahead despite all-time highs. However, the norm is that using technical analysis will usually result in you not buying stocks at ATHs. 

Fundamental analysis on the other hand is completely independent of technical analysis. You buy stocks based strictly and solely on your intrinsic value of the stock. If the stock is trading at ATHs but below its ATH you'll still buy the stock. How confident you're in your fundamental analysis is seen by how much you're buying. If you're really confident, you'll be buying a lot of shares.

Investing usually requires a mix between the two methods. However if you're unsure which you're placing more weight on making your decision, just ask yourself this simple question: Will I invest in this stock at ATHs if it is below my intrinsic valuation? If yes, it means you're placing greater weight on your fundamental analysis. If no, it means you're placing greater weight on technical analysis. Whichever way, you need to be confident in the approach you adopt, and to ensure you execute it consistently to achieve consistent results and returns.

──────────────────

Disclaimer:
The content and information provided on this blog is solely for educational and informational purposes, and should not be construed as financial advice. The accuracy or completeness of the content and information provided in the blog cannot be guaranteed. Before making any investment decisions, it is important for readers to research and carry out independent verification of the information provided, or consult with a qualified financial professional. No warranty and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of actions taken based on the ideas or information found in this blog.

No copyright infringement intended. The images used in this blog are solely for educational and informative purposes, and are © copyrighted by their respective owners.

Copyright © 2025. All rights reserved. SN Finance Blog

Comments

Post a Comment

Popular posts from this blog

How to avoid losing money during market crashes?

Image
Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice. ────────────────── The market will only crash when something unexpected and bad happens. If the bad news is expected, the market would have priced it in. But if it is unexpected, the market will react with a sudden sell-off. Prices will remain depressed as long as the market is not convinced that the worst is over. Once the market is convinced the worst is over, markets will rebound and rally. As investors, we want to get in before the majority. Staying ahead of the masses is critical to achieving above average returns. And we can do that in 2 ways: 1. Stay invested 2. Invest in panic By staying invested, you are way ahead of those who are either not invested or have yet to invest. By investing in panic, you are doing what the majority isn't, and that will deliver above average returns, assum...
Read more

Money is made during uncertainty

Image
Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice. ────────────────── Money is not made in certainty but during uncertainty  To invest in uncertainty is to invest when few are. This inevitably means you'll get a better deal. And better deals translate into better returns. People enjoy certainty, and as such are willing to pay a premium for it. Nothing comes free.  If you like certainty and stability, you have to pay for it. Therefore during times of economic stability and certainty, equities demand a higher premium. Conversely, if you're fine with accepting uncertainty, you'll get a much better price.  The market discounts uncertainty because it dislikes uncertainty. Now the question is whether you value certainty or your money more. If you're fine with uncertainty, you're rewarded with lower prices.  If you're uncomfortab...
Read more

You Can't Go Wrong With $1

Image
Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice. ────────────────── Recently at a fruit shop at a wet market, I got some fruits from the discount pile. $1 for 11 mangoes, $1 for 13 persimmons, and $1 for 3 bunches of bananas. I think it's a really good deal, but not everyone did. While many saw the discount pile, few bothered looking twice. It's unsurprising as the fruits weren't in great shape — mangoes were blemished, persimmons dented, and bananas split. In short, unappealing to many. But one man's trash is another man's treasure — this turned out to be really true.  The fruits were great not just because there were cheap but because they actually tasted good — sweet, juicy, fragrant, and they lasted me over a week which was unexpected.  All in all, while 1-2 mangoes were rotten, the rest were fine. Was it surprising? Yes...
Read more