What sort of investing style works best? This is a question I’ve seen stock market beginners ask in various forums. I usually start by explaining that there are really two investing styles, and understanding & using both of them can help maximize investing profits. These two styles are technical analysis and fundamental analysis.
Fundamental analysis is about analyzing the underlying fundamentals of the company whose stock you are evaluating. This is things like earnings, revenue, balance sheet, growth, etc. Companies with strong growth prospects and stable earnings are good investments and their stocks over the long term are likely to go up.
On the other hand, technical analysis involves analyzing recent price movements of the stock: instead of paying attention to the company, this approach assumes that stocks tend to send “signals” in their movement that can help you predict future price movement. For the investor focused on technical analysis, they want to see a variety of stock charts and indicators digging deep into recent market/price information so that the right investment timing can be determined.
Up until recently, iOS apps like ours, Stock TickerPicker, could only help you you study stock charts and do fundamental analysis. This was fine; even fundamental investors can dabble in technical analysis to help determine the right stock purchase timeframe even if they pick their stocks using fundamental analysis. However, with the introduction of Insights, small investment articles and lists of companies to track, we are now moving to cover fundamental analysis as well. The stocks recommended are chosen for underlying company reasons, not pure technicals. By adding Insights Stock TickerPicker now covers the spectrum of the two main equity investing styles. Check it out today!