Introduction to
Fundamental Analysis (FA). The most important aspect to invest in the stocks market.Fundamental
Analysis(FA) is the study of any data that might be expected to impact the
price or perceived value of an investment product, other than analyzing
the trading patterns of that stock itself.FA is the
examination of the underlying forces that affect the
well being of the economy, industry groups, and companies. As with most
analysis, the goal is to derive a forecast and profit from future price
movements.At the company level,
fundamental analysis may involve examination of financial data,
management, business concept and competition.At
the industry level, there might be an examination of supply and demand
forces for the products offered. For the national economy, fundamental
analysis might focus on economic data to assess the present and future
growth of the economy. By believing that prices do not accurately
reflect all available information, fundamental analysts look to
capitalize on perceived price discrepancies. Interest rates for
example, are considered the single most important economic factor
determining the exchange rates of currencies. One reason for this is
that large multinational investors would prefer to hold a bank account
in the currency that yields the highest return in terms of interest,
all other things being equal. Inflation is one of the key factors in
deciding the level of interest rates. For this reason any financial
data released that will affect interest rates or inflation is of great
importance to a trader, as it will offer trading opportunities as the
market re-values itself.