In the previous posts we have covered investment from many perspectives and views we focused first on how to start any investment with a clear vision in mind, then we moved to factors that influence investment and in the last post we focused on risk which is the key to starting an investment. For those who didn't check the other posts, links are bellow!
"Investing in steem as early as possible" : https://steemit.com/steem/@simolab/2-invest-in-steem-today-before-tomorrow,
," Tips to start an investment" : https://steemit.com/investment/@simolab/3-tips-to-start-an-investment
, "Investment factors": https://steemit.com/investment/@simolab/4-investment-factors-learn-how-to-manage-it
,"Investment risk " : https://steemit.com/risk/@simolab/5-investment-risk-how-to-manage-it
and my introduction post: https://steemit.com/introduceyourself/@simolab/hi-there-let-me-introduce-myself.
In this article we will shed the light on something that we had already talked about but in more detail.It is about investment analysis.
Well many investors face a huge problem by starting their projects without analysis which is a big mistake that lead to low success rates and high risk rate. That requires then to know more about investment analysis and how to manage in a good way the project.
First of all here's a brief definition of investment analysis,
DEFINITION:
Investment analysis is about analyzing past returns to anticipate future returns and researching into data relating to profitability and stability of business and this requires looking at financial statements to test the company's health.
As tools of analysis there is the comparison of funds development which is essential during the analysis process and expense ratio to control expenses made by the investor and also checking up the management stability and market weighting.
TYPES OF INVESTMENT ANALYSIS:
A. FUNDAMENTAL ANALYSIS
Fundamental analysis is the most known type of analysis because it is essential in the investment project. You are investing only if you perform this type of analysis. Indeed, in this type the analyse does not focus on a particular factor or tool because the subject of investment is broad.
But we should not consider it as an easy task to do because the thing is we usually do not know where to start the analysis.
Fundamental analysis is known to be focusing on the major points of investment factors such as : Funds,expenses, assets,revenue...
So, it is to be taken into consideration by the new investors that lack experience and help them to cover many analysis sides.
B. TECHNICAL ANALYSIS
Technical analysis tends to focus on understanding the market status concerning the price by an analyse of supply and demand in it. So it is a method that involves calculations and statistics.
Unlike fundamental analysis, it does not give importance to stock's valuation but works on calculation based on past trading data and come up with a conclusion about the future according to the information in the data.
C. BOTTOM-UP INVESTING
It s a type of analyse that focus on the individual stocks which lead to a long term strategy of the investor knowing that he gives a lot of interest to all the information about the stock and focus on it and basically doesn't give much interest to the macro-economy. Yet, its attention is all on the company itself, it is based on factors that includes the financial statement of the company and its health. So the investment decision here is based on micro-economy .
D. TOP-DOWN INVESTING
This type is the opposite of bottom up, its focus is on the market, so the strategy here is about macroeconomic factors . the investors look at the performance of the economy and make decisions based on the results. This type of investment analysis requires paying more attention to the public of the company.
To conclude there are many types and ways of analyzing an investment, but the most important thing in that is the fact of analyzing itself because many investors start their projects without any solid basics or information about the field they are working in, which lead to a complete failure and make the chance of success very low. If the investor does not have the ability to follow these instructions about ways of analysis at least they should consult a financial adviser or anyone who is professional and could give some help.
Well, that's all for today's article, I hope this has been helpful and appreciate any remark or add on this post. This way I develop more my contents and find new ideas that might be interesting .
Feel free to RESTEEM the post for other people to take benefit from it and good luck with your future investment projects !!!
100% OWN WORK !!! , based on my management studies experience, except for the PICTURES !!! The source is bellow :
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