Wednesday, April 30, 2008

Fundamental and Technical

Why the world richest investor, Warren Buffet invest without looking at chart? Investment is buying a share of a company. If the company doing well and the chart don’t look pretty, it is still worth to buy. This is same to the company which not doing well and the price chart looks attractive to buy. No matter how, fundamental of the company must be first thing to consider before invest your hard earn money to that company.

In stock and share analysis, there are two common types which are fundamental and technical. Fundamental is looking at the company base performance and knowing what the company doing. Technical is basically study the psychology of the people who trade on the share.

Some people only depend on technical to trade in the market. The risk is what if the trend of the share is manipulated by the syndicate behind the stock? Of course the fundamental report can be false some timewhen the company report a misleading report. Anyway to reduce the risk of the investment portfolio, it is safer to understand the fundamental background of the company and then buy with the assist by the technical tools.

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