Smart Stock Analysis and Investing: Stock market investment strategies

p d vadoliya
Ebook
95
Pages
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About this ebook

Fundamental analysis is important for long-term investing. While technical analysis is also important, understanding the fundamentals of a company is even more critical. However, many people find fundamental analysis challenging because it involves understanding complex terms and financial statements, such as balance sheets, cash flow statements, and various ratios. For beginners, terms like net income, revenue, and operating income can be difficult to grasp.

This book aims to cover both basic and advanced financial terms in detail, with examples to help new investors understand them. By learning these fundamentals, you’ll be able to determine whether a stock is undervalued or overvalued.

Nowadays, financial websites provide a lot of information, but they often lack a comprehensive view of a company's health. For example, seeing an EPS (earnings per share) figure of 25% might not tell you whether that’s good or bad without additional context. Similarly, understanding terms like ROE (return on equity) is important before making long-term investments.

In the short term, technical analysis involves studying chart patterns, using various indicators, and considering news and other factors. However, fundamental analysis requires a deeper understanding of a company’s operations, income generation, expenses, and overall business model. By gaining a solid grasp of these basics, you can make more informed investment decisions and potentially achieve greater returns over time.

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