If you are looking at an investment angle, the fundamental analysis process plays an important role. However, technical analysis still helps in determining the prices to enter or exit, if you are concerned about market timing. However, if you are investing for long term you can rely more on fundamentals because if the underlying business of a company or stock is good the prices will be supported by the company's strong earnings, which will go up in future increasing your capital appreciation and dividend yield.
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V. Sridhar, Lead Consultant - PurpleLeap - A Pearson-Educomp Co.
| 12 05 2012 13:38:03 +0000
Both Fundamental Analysis and Technical Analysis are the two sides of a coin. Both are equally important. Let us not see them with a different eye. Regards, Anna George. Web Analyst. Nichepro Technologies. Bangalore. http://www.nichesuite.com
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Anna George, Web Analyst, NichePro Consulting LLC
| 05 11 2012 05:11:15 +0000
Its very tough to define because F.A. is related to T.A and the vice-versa. Though very few people believe this but i have strong reason for this. If given me a chance to chose F.A or T.A i would go with Fundamental Ananlysis.
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Mithu Deb, Analyst, Northern Trust
| 06 06 2010 20:58:05 +0000
If somebody takes the India stocks in consideration, it must be of long term. Further any fundamental analysis in any market will give better proven returns for long term. Technical analysis or charting in only short term or day trading, Further in technicals it cannot be assured since the charts does`nt takes must time to tun oppsite views. One may have to book losses on technicals analysis.
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Jyoti CHETANI, Freelancer, Equity Research/Analytics
| 06 06 2010 17:16:51 +0000
I have to say fundamental analysis brcause TA take into purvey only short term movements of the market while FA looks long term. Trading short term is not optimal return strategy globaly due to increase in trqnsaction costs due to volume trading.
By
Mathew Cherian, Research Associate/Analyst, Western Michigan University
| 03 31 2010 09:25:41 +0000
Nothing beats the power of compounding and the only way to take advantage of compounding is through fundamental analysis. None of the top investors look at daily price movements. Fundamental analysis invests on the company, not on the price movement. Moreover, in technical analysis, stock market volatility is your friend - which is seasonal. Take the last 4 - 5 months for example. Volatility has reached all time lows....few technical players have made money since Jan in our markets. In fundamental analysis, the power of compounding is your friend. Technical analysis may yield a get rich quickly scheme, when you work using rapid reflexes, but you can go broke just as quickly if you don’t know what you’re doing. Market timing rules your methods. Fundamental analysis is the path taken to grow rich more slowly, relatively speaking, but depending on how your portfolio is set up, it can actually be quicker than you think. It often involves longer term investing strategies. Ultimately, what’s important is that you know yourself well enough to figure out what you’re comfortable with. I don’t believe that there are any wrong investment approaches in the absolute sense, just dangerous ones. A strategy becomes dangerous if you decide to apply it without sufficient planning, knowledge or study, causing you to make reckless moves or generate heavy losses. So the key is to go with what works for you, realizing your limitations while capitalizing on your strengths.
By
venky , Freelancer, Freelancer
| 03 30 2010 18:57:51 +0000
It's like two sides of the coin, together they can fulfill the word called trusted research. But practically fundamental analysis is for taking some asset for a long term. Atleast more than 1 day. While technical is for the range of 5 minuts to 5 days. This is a wide usage of the fundamental and technical analysis.
By
Mohan Vasiyani, Treasury & Forex Management, Anagram Capital Ltd
| 03 30 2010 10:44:58 +0000
The returns in the stock market is always associated with risk. Fundamental Analysis is a better tool in reducing the risk to return ratio when compared to technical analysis. The inherit nature of the stock market which developed with the view of the growth of the industries or companies will always provide an better tool to generate profits in the trade.
Also with out strong fundamental the stocks of the company cannot perform well in the market. Hence even for technical analysis to take place the stock should have a strong fundamental.
And fundamental analysis will give a better returns as compared to technical analysis when we consider the negative signals the stocks may show during secondary reactions and oversold positions when the stock is falling.
Hence to earn a better returns "Fundamental Analysis" is a better option.
What is your take on this?
By
deepan , Sr.Research Analyst, Beroe
| 03 29 2010 10:09:08 +0000
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Fundamentals exist in the market from the time long before the Technicals came into play. Can anyone answer me – What was the utility for the Technicals to take birth if Fundamentals would have served the purpose well? There is, perhaps, a wrong saying that Technicals always forecast short-term views. There are a lot of examples where you can find Technicals suggesting long-term views. The reason why Fundamentals suggest long term views is that they can only, with the help of their judging parameters, try to evaluate whether a stock is undervalued or not. They fail to point out the exact Entry/Exit levels. Thus people, following the Fundamentals, are often found to get trapped for the first two years ( when the price declines from the level of his/her purchase and stay below that level for the first two years) though he/she might have made a handsome profit from that particular deal in the long run. Thus, he has misused his resources for the first two years in the process. This is unlikely with Technicals as they provide us with the exact Entry/Exit levels. There is also a saying that Fundamentals earn more than the Technicals. According to me, if the Fundamentals ask someone to invest in a particular script for a period of 10 years and if another person, starting with the same capital and following the Technicals, keep on compounding his profit together with his capital ( without withdrawing the profit he makes from each trade, as the Technicals are often found to do) for that 10 years trading in more than one stock, then I think it will be found that the person following the Technicals will accumulate more money than one who follows the Fundamentals ( as there is no wastage of resources).If the main funda is to earn from the rise of price, why should we not not focus ourselves only on the price-movement (i.e. on Technicals)? This is completely my view and it should not be taken by anyone personally.
By
Santanu Roy, Commercial, Calcutta Electric Supply
| 05 03 2012 13:35:48 +0000
Fundamentals are being used from time long before Technicals came into play. What was then the utility of the invention of Technicals if Fundamentals would have served the purpose?It is, perhaps a wrong saying that technicals only help trade short-term basis while there are a lot of examples where we can find technicals suggest a long term holding without misusing the time as Fundamentals do. Fundamentals can only suggest whether a stock is undervalued or not? They cannot point out the exact entry/exit point. As a result of which many traders/investor, following the Fundamentals, were found to gain a handsome profit in a period of 5-10 years where in the first 1 or 2 years he/she was suffering a loss whereby he/she got trapped both by time and money for the first 1-2 years( thus being misused). If the main funda is to make profit with the rise in price why should we not focus ourselves only on price (i.e. on Technicals). The conclusions that the Fundamentals draw are reflected in the price-movement as 'Price discounts everything."
By
Santanu Roy, Commercial, Calcutta Electric Supply
| 05 03 2012 12:50:11 +0000
Don't try to link analysis with return only, because both will give you not the same picture, as the parameters are diffrent, base is diffrent. Use them with your own objective. i.e. long term return or short term, equity market or debt market etc.
By
Mohan Vasiyani, Treasury & Forex Management, Anagram Capital Ltd
| 03 31 2010 05:46:53 +0000
i believe thattechnical analysys provide beeter results just because technical analysis gives u the levels where u can exit ur posstions. And now the kind the market we have from the past 3 years, we have seen market change its trend very sharply. Thats where technical analysis benefits over fundamental analysis... If u r a long term investor then fundamental analysis is a good choice but if u have invested for less then 1-2 years then technical analysis is much better .Because it give u when to exit. Fundamental analysis did not tell u this...... thanks esha 4 sending this interesting ques....
By
vikash vardhman, Relationship Manager, Security/ Equity Research Analyst, SPA Securities Ltd.
| 03 30 2010 14:11:06 +0000
Deepan In my opinion though both the analysis are required ,i believe technical analysis has an upper hand. See a company's share price volatility is the result of the 2 reasons :First News about the company and second news about the economy.It is the latter which dominates though for long term perspective ,one should definitely look at fundamental anaylsis,but for speculation and short term gains ,technical analysis is undoubtedly better.
By
Vikas Bhatnagar, Manager Finance, Tata Motors Ltd
| 03 30 2010 11:18:39 +0000
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