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Investors usually use technical or fundamental analysis. Some use both, but I would say it is not very common. Technical guys are usually trading, they are loo
by jakarta 16y ago
Investors usually use technical or fundamental analysis. Some use both, but I would say it is not very common.
Technical guys are usually trading, they are looking at price charts and trying to gauge supply/demand and figure out how prices will change.
Fundamental investors take longer term perspectives, they analyze reported financials and qualitative factors, model earnings, etc, to determine where they think the company's performance will go and how that ultimately drives the stock price.
From there, you have some other possible divisions. There are traders for every asset class (fixed income, currencies, commodities, derivatives). Then, some investors differ by strategy (value, growth, global macro, event driven, long, short, long/short, market neutral, distressed debt). Some might use a combination of both.
E.g.: a macro trader might use technical analysis in the day to day while analyzing data releases from foreign countries to determine how their bonds will perform. So a combo of both fundamental and technical analysis.
Hope that helps.