Fundamentals Vs technical analysis
In the world of investing, checking ALL necessary dots matters. The reason why over 90% of investors don't go far is because they fail to pay attention to details. The 'I don't have time' mentality' always backfires. Maybe you feel this big financial moguls don't know what to do with money when they raise a team with a good pay just to secure the needed details. I personally feel the financial market is not a one man thing. At some point, you'll grow weary of perhaps let your emotions set in. You know how it ends from here; that liquidation that ends your many years of market existence. Maybe I shouldn't say much so I don't remind you of that which you long to forget.
Nevertheless, we learn from losses when it comes to the financial market and if you are not prepared then don't bother to jump in, it's a very dangerous water. Picking the best companies to invest in is worth the effort when you are thinking long term. Let's take time and delve into the fundamentals and technical analysis of investing and why both seem important. I can say I still have cryptocurrencies I purchased in my early days that is still doomed. When I once in a while check on it I often laugh. Should I throw blame on the people behind it? To some point I must say yet the other big question remains, why did I end up buying this assets in the first place?.
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trends are very much deceiving. Warrent Buffet once said, 'he will invest only in what he knows'. Take for instance Coca cola, you don't need to be told much. How often do we hold stocks or cryptos that may never make that uptrend we are expecting. The two ways investors have primarily analyzed security has always been through technical analysis and fundamental analysis. Yet I must say, a lot of us are very bad when it comes to fundamentals. Why did you buy the last stock or crypto you bought? Simple, it has always been because of market trends. As we speak, during this financial market downtimes a lot are off only to return during the next bull run or hype as the case may be. So you see, many of us are worthy of financial loss.
Why depend solely on technical analysis (TA)? It's one could thing to be encouraged by trends and market charts and it's another to delve even deeper to fundamentals. Technical analysis to me is more of a market gamble. What does it entail? We are looking at charts and graphs to see the data volume and price increments. It opens up patterns for support and resistance level plus the well known candlesticks. There are other technical indicators that sums up this categories with new ones on the arising. The fact about TA is this, it's a short term market insight just to benefit from discrepancies favoring day traders mostly. Don't also forget, it comes with consequences that can deter portfolios. We mostly mistaken gambling for investing, or luck for professionalism.
Who are they?
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That's the question every good investor never fails to ask. Many of us have bought Bitcoin without even knowing what cryptocurrency is not to even talk of blockchain tech. What are the underlying factors behind an asset, the industry and the company? Beyond this one time market pump, what are their long term goals. Who are the people/team behind this projects. Let me just site example from the area of sport betting. Not actually my thing yet I see a lot or people always falling victim when their expected big team losses. You know their bet was that they will win from their technical analysis. In the end what the assume is that the club did no put up their best performance. What they mostly fail to checkmate is the fundamentals; has fatique entered the team?, what's their starting line up? How very important is a win to them? Will they reserve their big players for the next match? You can seen more from here.
A fundamental market analyser will always have an hedge because his focus is base on realities at least to a substantial extent. When comparing the depth of loss with someone that is only technically inclined you will always notice a huge gap. While the other may get a full liquidation, he will always be left with what to salvate himself. Secondly, fundamental analysis help to ascertain compound interest overtime. Anyone that thinks short term should never boast of investing. You also invest with much more confidence, meaning a one time gain will go far in your portfolio. Let's say Coca cola for instance offered you shares, with all your technical and fundamental analysis, you can say the fear is less from here.
To conclude, let me add, showing financial intelligence when approaching the world of investing is key. Taking time to tick the necessary dots may seem boring yet it will be worth a long term success. This seems to be the most made mistakes by assumed investors. Running after market hypes with a 'get rich quick' expectations has brought depression to several individuals. Whether stocks, bonds, crypto or any other you can think of, detail picking assets is a wise financial move. When next you notice market trends, check fundamentals.
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